Correlation Between BioNTech and Interactive Brokers

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

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

Diversification Opportunities for BioNTech and Interactive Brokers

-0.15

Correlation Coefficient

BioNTech  Interactive Brokers

Good diversification

The 3 months correlation between BioNTech and Interactive is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Interactive Brokers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Brokers 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 Interactive Brokers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Brokers has no effect on the direction of BioNTech i.e., BioNTech and Interactive Brokers go up and down completely randomly.

Pair Corralation between BioNTech and Interactive Brokers

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Interactive Brokers. In addition to that, BioNTech is 1.23 times more volatile than Interactive Brokers Group. It trades about -0.11 of its total potential returns per unit of risk. Interactive Brokers Group is currently generating about -0.04 per unit of volatility. If you would invest  18,696  in Interactive Brokers Group on October 7, 2024 and sell it today you would lose (324.00) from holding Interactive Brokers Group or give up 1.73% of portfolio value over 90 days.

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

BioNTech SE  vs.  Interactive Brokers Group

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.

Interactive Brokers

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Interactive Brokers Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward-looking signals, Interactive Brokers reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and Interactive Brokers

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

The idea behind BioNTech SE and Interactive Brokers Group 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.