Correlation Between BioNTech and Barings BDC

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

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

Diversification Opportunities for BioNTech and Barings BDC

0.11

Correlation Coefficient

BioNTech  Barings BDC

Average diversification

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

Pair Corralation between BioNTech and Barings BDC

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Barings BDC. In addition to that, BioNTech is 2.1 times more volatile than Barings BDC. It trades about -0.01 of its total potential returns per unit of risk. Barings BDC is currently generating about 0.07 per unit of volatility. If you would invest  651.00  in Barings BDC on September 20, 2024 and sell it today you would earn a total of  284.00  from holding Barings BDC or generate 43.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

BioNTech SE  vs.  Barings BDC

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.

Barings BDC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barings BDC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Barings BDC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BioNTech and Barings BDC

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

The idea behind BioNTech SE and Barings BDC 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.