Correlation Between BioNTech and Celestica

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

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

Diversification Opportunities for BioNTech and Celestica

-0.23

Correlation Coefficient

BioNTech  Celestica

Very good diversification

The 3 months correlation between BioNTech and Celestica is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of BioNTech i.e., BioNTech and Celestica go up and down completely randomly.

Pair Corralation between BioNTech and Celestica

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Celestica. But the stock apears to be less risky and, when comparing its historical volatility, BioNTech SE is 1.44 times less risky than Celestica. The stock trades about -0.07 of its potential returns per unit of risk. The Celestica is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  8,667  in Celestica on September 27, 2024 and sell it today you would earn a total of  1,086  from holding Celestica or generate 12.53% return on investment over 90 days.

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

BioNTech SE  vs.  Celestica

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Celestica

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and Celestica

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

The idea behind BioNTech SE and Celestica 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.