Correlation Between BioNTech and FS KKR

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

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

Diversification Opportunities for BioNTech and FS KKR

0.39

Correlation Coefficient

BioNTech  FS KKR

Weak diversification

The 3 months correlation between BioNTech and FSK is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and FS KKR Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS KKR Capital 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 FS KKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS KKR Capital has no effect on the direction of BioNTech i.e., BioNTech and FS KKR go up and down completely randomly.

Pair Corralation between BioNTech and FS KKR

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the FS KKR. In addition to that, BioNTech is 2.49 times more volatile than FS KKR Capital. It trades about -0.05 of its total potential returns per unit of risk. FS KKR Capital is currently generating about 0.0 per unit of volatility. If you would invest  2,059  in FS KKR Capital on December 20, 2024 and sell it today you would lose (7.00) from holding FS KKR Capital or give up 0.34% of portfolio value over 90 days.

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

BioNTech SE  vs.  FS KKR Capital

BioNTech SE

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

FS KKR Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days FS KKR Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, FS KKR is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BioNTech and FS KKR

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

The idea behind BioNTech SE and FS KKR Capital 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.