Correlation Between BioNTech and Boot Barn

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

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

Diversification Opportunities for BioNTech and Boot Barn

0.51

Correlation Coefficient

BioNTech  Boot Barn

Very weak diversification

The 3 months correlation between BioNTech and Boot is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Boot Barn Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boot Barn Holdings 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 Boot Barn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boot Barn Holdings has no effect on the direction of BioNTech i.e., BioNTech and Boot Barn go up and down completely randomly.

Pair Corralation between BioNTech and Boot Barn

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Boot Barn. But the stock apears to be less risky and, when comparing its historical volatility, BioNTech SE is 1.29 times less risky than Boot Barn. The stock trades about -0.01 of its potential returns per unit of risk. The Boot Barn Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  16,160  in Boot Barn Holdings on October 8, 2024 and sell it today you would lose (310.00) from holding Boot Barn Holdings or give up 1.92% of portfolio value over 90 days.

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

BioNTech SE  vs.  Boot Barn Holdings

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.

Boot Barn Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boot Barn Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Boot Barn is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BioNTech and Boot Barn

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

The idea behind BioNTech SE and Boot Barn Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.