Correlation Between BioNTech and Safety Shot

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

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

Diversification Opportunities for BioNTech and Safety Shot

0.24

Correlation Coefficient

BioNTech  Safety Shot

Modest diversification

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

Pair Corralation between BioNTech and Safety Shot

Given the investment horizon of 90 days BioNTech SE is expected to generate 0.19 times more return on investment than Safety Shot. However, BioNTech SE is 5.19 times less risky than Safety Shot. It trades about 0.12 of its potential returns per unit of risk. Safety Shot is currently generating about 0.02 per unit of risk. If you would invest  9,015  in BioNTech SE on September 5, 2024 and sell it today you would earn a total of  2,544  from holding BioNTech SE or generate 28.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.63%
Values	Daily Returns

BioNTech SE  vs.  Safety Shot

BioNTech SE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech showed solid returns over the last few months and may actually be approaching a breakup point.

Safety Shot

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Safety Shot are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Safety Shot showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and Safety Shot

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

The idea behind BioNTech SE and Safety Shot 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.