Correlation Between BioNTech and Allied Gaming

Can any of the company-specific risk be diversified away by investing in both BioNTech and Allied Gaming 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 BioNTech and Allied Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BioNTech SE and Allied Gaming Entertainment, you can compare the effects of market volatilities on BioNTech and Allied Gaming 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 BioNTech with a short position of Allied Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Allied Gaming.

Diversification Opportunities for BioNTech and Allied Gaming

-0.11

Correlation Coefficient

BioNTech  Allied Gaming

Good diversification

The 3 months correlation between BioNTech and Allied is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Allied Gaming Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Gaming Entert and BioNTech 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 BioNTech SE are associated (or correlated) with Allied Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Gaming Entert has no effect on the direction of BioNTech i.e., BioNTech and Allied Gaming go up and down completely randomly.

Pair Corralation between BioNTech and Allied Gaming

Given the investment horizon of 90 days BioNTech SE is expected to generate 0.49 times more return on investment than Allied Gaming. However, BioNTech SE is 2.06 times less risky than Allied Gaming. It trades about -0.09 of its potential returns per unit of risk. Allied Gaming Entertainment is currently generating about -0.11 per unit of risk. If you would invest  12,082  in BioNTech SE on October 8, 2024 and sell it today you would lose (503.00) from holding BioNTech SE or give up 4.16% of portfolio value over 90 days.

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

BioNTech SE  vs.  Allied Gaming Entertainment

BioNTech SE

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, BioNTech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allied Gaming Entert

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allied Gaming Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with BioNTech and Allied Gaming

The main advantage of trading using opposite BioNTech and Allied Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Allied Gaming 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 Allied Gaming will offset losses from the drop in Allied Gaming's long position.

The idea behind BioNTech SE and Allied Gaming Entertainment 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.