Correlation Between BioNTech and SNDL

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

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

Diversification Opportunities for BioNTech and SNDL

-0.18

Correlation Coefficient

BioNTech  SNDL

Good diversification

The 3 months correlation between BioNTech and SNDL is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of BioNTech i.e., BioNTech and SNDL go up and down completely randomly.

Pair Corralation between BioNTech and SNDL

Given the investment horizon of 90 days BioNTech SE is expected to generate 2.3 times more return on investment than SNDL. However, BioNTech is 2.3 times more volatile than SNDL Inc. It trades about 0.29 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.31 per unit of risk. If you would invest  10,187  in BioNTech SE on September 17, 2024 and sell it today you would earn a total of  1,851  from holding BioNTech SE or generate 18.17% return on investment over 90 days.

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

BioNTech SE  vs.  SNDL Inc

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 recent stock price disturbance, may contribute to short-term losses for the investors.

SNDL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with BioNTech and SNDL

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

The idea behind BioNTech SE and SNDL Inc 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 Stocks Directory module to find actively traded stocks across global markets.