Correlation Between BioNTech and Oatly Group

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

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

Diversification Opportunities for BioNTech and Oatly Group

0.47

Correlation Coefficient

BioNTech  Oatly Group

Very weak diversification

The 3 months correlation between BioNTech and Oatly is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB 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 Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of BioNTech i.e., BioNTech and Oatly Group go up and down completely randomly.

Pair Corralation between BioNTech and Oatly Group

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Oatly Group. But the stock apears to be less risky and, when comparing its historical volatility, BioNTech SE is 2.83 times less risky than Oatly Group. The stock trades about -0.05 of its potential returns per unit of risk. The Oatly Group AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,220  in Oatly Group AB on December 20, 2024 and sell it today you would lose (266.00) from holding Oatly Group AB or give up 21.8% of portfolio value over 90 days.

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

BioNTech SE  vs.  Oatly Group AB

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.

Oatly Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oatly Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Oatly Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BioNTech and Oatly Group

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

The idea behind BioNTech SE and Oatly Group AB 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.