Correlation Between BioNTech and Globalfoundries

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

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

Diversification Opportunities for BioNTech and Globalfoundries

0.14

Correlation Coefficient

BioNTech  Globalfoundries

Average diversification

The 3 months correlation between BioNTech and Globalfoundries is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries 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 Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of BioNTech i.e., BioNTech and Globalfoundries go up and down completely randomly.

Pair Corralation between BioNTech and Globalfoundries

Given the investment horizon of 90 days BioNTech SE is expected to generate 1.26 times more return on investment than Globalfoundries. However, BioNTech is 1.26 times more volatile than Globalfoundries. It trades about 0.1 of its potential returns per unit of risk. Globalfoundries is currently generating about -0.13 per unit of risk. If you would invest  11,685  in BioNTech SE on October 11, 2024 and sell it today you would earn a total of  530.00  from holding BioNTech SE or generate 4.54% return on investment over 90 days.

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

BioNTech SE  vs.  Globalfoundries

BioNTech SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Globalfoundries

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Globalfoundries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Globalfoundries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BioNTech and Globalfoundries

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

The idea behind BioNTech SE and Globalfoundries 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.