Correlation Between SBM OFFSHORE and BioNTech

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

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

Diversification Opportunities for SBM OFFSHORE and BioNTech

-0.22

Correlation Coefficient

SBM OFFSHORE  BioNTech

Very good diversification

The 3 months correlation between SBM and BioNTech is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE i.e., SBM OFFSHORE and BioNTech go up and down completely randomly.

Pair Corralation between SBM OFFSHORE and BioNTech

Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 2.08 times less return on investment than BioNTech. But when comparing it to its historical volatility, SBM OFFSHORE is 2.73 times less risky than BioNTech. It trades about 0.18 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  11,290  in BioNTech SE on October 10, 2024 and sell it today you would earn a total of  700.00  from holding BioNTech SE or generate 6.2% return on investment over 90 days.

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

SBM OFFSHORE  vs.  BioNTech SE

SBM OFFSHORE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SBM OFFSHORE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, SBM OFFSHORE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BioNTech SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BioNTech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SBM OFFSHORE and BioNTech

The main advantage of trading using opposite SBM OFFSHORE and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE 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 SBM OFFSHORE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..