Correlation Between BioNTech and Mach Natural

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

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

Diversification Opportunities for BioNTech and Mach Natural

0.24

Correlation Coefficient

BioNTech  Mach Natural

Modest diversification

The 3 months correlation between BioNTech and Mach is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Mach Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach Natural Resources 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 Mach Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach Natural Resources has no effect on the direction of BioNTech i.e., BioNTech and Mach Natural go up and down completely randomly.

Pair Corralation between BioNTech and Mach Natural

Given the investment horizon of 90 days BioNTech SE is expected to generate 1.59 times more return on investment than Mach Natural. However, BioNTech is 1.59 times more volatile than Mach Natural Resources. It trades about -0.09 of its potential returns per unit of risk. Mach Natural Resources is currently generating about -0.26 per unit of risk. If you would invest  11,975  in BioNTech SE on November 28, 2024 and sell it today you would lose (878.00) from holding BioNTech SE or give up 7.33% 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.  Mach Natural Resources

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 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.

Mach Natural Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mach Natural Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Mach Natural is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BioNTech and Mach Natural

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

The idea behind BioNTech SE and Mach Natural Resources 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.

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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.