Correlation Between FS KKR and BioNTech

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

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

Diversification Opportunities for FS KKR and BioNTech

0.39

Correlation Coefficient

FS KKR  BioNTech

Weak diversification

The 3 months correlation between FSK and BioNTech is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding FS KKR Capital and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and FS KKR 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 FS KKR Capital 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 FS KKR i.e., FS KKR and BioNTech go up and down completely randomly.

Pair Corralation between FS KKR and BioNTech

Considering the 90-day investment horizon FS KKR Capital is expected to generate 0.4 times more return on investment than BioNTech. However, FS KKR Capital is 2.49 times less risky than BioNTech. It trades about 0.0 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.05 per unit of risk. If you would invest  2,059  in FS KKR Capital on December 20, 2024 and sell it today you would lose (7.00) from holding FS KKR Capital or give up 0.34% of portfolio value over 90 days.

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

FS KKR Capital  vs.  BioNTech SE

FS KKR Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days FS KKR Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, FS KKR is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with FS KKR and BioNTech

The main advantage of trading using opposite FS KKR and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS KKR 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 FS KKR Capital 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.