Correlation Between BioNTech and Enlightify

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

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

Diversification Opportunities for BioNTech and Enlightify

-0.42

Correlation Coefficient

BioNTech  Enlightify

Very good diversification

The 3 months correlation between BioNTech and Enlightify is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify 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 Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of BioNTech i.e., BioNTech and Enlightify go up and down completely randomly.

Pair Corralation between BioNTech and Enlightify

Given the investment horizon of 90 days BioNTech is expected to generate 4.88 times less return on investment than Enlightify. But when comparing it to its historical volatility, BioNTech SE is 3.07 times less risky than Enlightify. It trades about 0.08 of its potential returns per unit of risk. Enlightify is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  115.00  in Enlightify on October 27, 2024 and sell it today you would earn a total of  18.00  from holding Enlightify or generate 15.65% return on investment over 90 days.

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

BioNTech SE  vs.  Enlightify

BioNTech SE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Enlightify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlightify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BioNTech and Enlightify

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

The idea behind BioNTech SE and Enlightify 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.