Correlation Between BioNTech and 838518AA6

Can any of the company-specific risk be diversified away by investing in both BioNTech and 838518AA6 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 838518AA6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BioNTech SE and US838518AA63, you can compare the effects of market volatilities on BioNTech and 838518AA6 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 838518AA6. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and 838518AA6.

Diversification Opportunities for BioNTech and 838518AA6

-0.04

Correlation Coefficient

BioNTech  838518AA6

Good diversification

The 3 months correlation between BioNTech and 838518AA6 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and US838518AA63 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US838518AA63 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 838518AA6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US838518AA63 has no effect on the direction of BioNTech i.e., BioNTech and 838518AA6 go up and down completely randomly.

Pair Corralation between BioNTech and 838518AA6

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the 838518AA6. In addition to that, BioNTech is 1.66 times more volatile than US838518AA63. It trades about -0.05 of its total potential returns per unit of risk. US838518AA63 is currently generating about 0.01 per unit of volatility. If you would invest  8,399  in US838518AA63 on December 25, 2024 and sell it today you would earn a total of  36.00  from holding US838518AA63 or generate 0.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.8%
Values	Daily Returns

BioNTech SE  vs.  US838518AA63

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.

US838518AA63

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in US838518AA63 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 838518AA6 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 838518AA6

The main advantage of trading using opposite BioNTech and 838518AA6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, 838518AA6 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 838518AA6 will offset losses from the drop in 838518AA6's long position.

The idea behind BioNTech SE and US838518AA63 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.