Correlation Between BURLINGTON STORES and BioNTech

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

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

Diversification Opportunities for BURLINGTON STORES and BioNTech

0.57

Correlation Coefficient

BURLINGTON STORES  BioNTech

Very weak diversification

The 3 months correlation between BURLINGTON and BioNTech is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and BURLINGTON STORES 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 BURLINGTON STORES are associated (or correlated) with BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and BioNTech go up and down completely randomly.

Pair Corralation between BURLINGTON STORES and BioNTech

Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.53 times more return on investment than BioNTech. However, BURLINGTON STORES is 1.87 times less risky than BioNTech. It trades about 0.26 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.11 per unit of risk. If you would invest  23,400  in BURLINGTON STORES on October 8, 2024 and sell it today you would earn a total of  4,400  from holding BURLINGTON STORES or generate 18.8% return on investment over 90 days.

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

BURLINGTON STORES  vs.  BioNTech SE

BURLINGTON STORES

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BURLINGTON STORES are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, BURLINGTON STORES exhibited solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, BioNTech is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BURLINGTON STORES and BioNTech

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

The idea behind BURLINGTON STORES and BioNTech SE 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.