Correlation Between BioNTech and Allient

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

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

Diversification Opportunities for BioNTech and Allient

0.27

Correlation Coefficient

BioNTech  Allient

Modest diversification

The 3 months correlation between BioNTech and Allient is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of BioNTech i.e., BioNTech and Allient go up and down completely randomly.

Pair Corralation between BioNTech and Allient

Given the investment horizon of 90 days BioNTech is expected to generate 12.98 times less return on investment than Allient. In addition to that, BioNTech is 1.04 times more volatile than Allient. It trades about 0.02 of its total potential returns per unit of risk. Allient is currently generating about 0.22 per unit of volatility. If you would invest  1,816  in Allient on October 20, 2024 and sell it today you would earn a total of  764.00  from holding Allient or generate 42.07% return on investment over 90 days.

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

BioNTech SE  vs.  Allient

BioNTech SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Allient

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and Allient

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

The idea behind BioNTech SE and Allient 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.