Correlation Between Amgen and BioNTech

Can any of the company-specific risk be diversified away by investing in both Amgen and BioNTech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amgen and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amgen Inc and BioNTech SE, you can compare the effects of market volatilities on Amgen and BioNTech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amgen with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and BioNTech.

Diversification Opportunities for Amgen and BioNTech

-0.56

Correlation Coefficient

Amgen  BioNTech

Excellent diversification

The 3 months correlation between Amgen and BioNTech is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Amgen is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amgen Inc are associated (or correlated) with BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Amgen i.e., Amgen and BioNTech go up and down completely randomly.

Pair Corralation between Amgen and BioNTech

Given the investment horizon of 90 days Amgen Inc is expected to generate 0.46 times more return on investment than BioNTech. However, Amgen Inc is 2.17 times less risky than BioNTech. It trades about 0.2 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.07 per unit of risk. If you would invest  25,722  in Amgen Inc on December 29, 2024 and sell it today you would earn a total of  4,855  from holding Amgen Inc or generate 18.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Amgen Inc  vs.  BioNTech SE

Amgen Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Amgen displayed solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Amgen and BioNTech

The main advantage of trading using opposite Amgen and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, BioNTech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BioNTech will offset losses from the drop in BioNTech's long position.

The idea behind Amgen Inc and BioNTech SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..