Correlation Between Mind Medicine and BioNTech

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

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

Diversification Opportunities for Mind Medicine and BioNTech

0.57

Correlation Coefficient

Mind Medicine  BioNTech

Very weak diversification

The 3 months correlation between Mind and BioNTech is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mind Medicine and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Mind Medicine 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 Mind Medicine 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 Mind Medicine i.e., Mind Medicine and BioNTech go up and down completely randomly.

Pair Corralation between Mind Medicine and BioNTech

Given the investment horizon of 90 days Mind Medicine is expected to generate 1.74 times more return on investment than BioNTech. However, Mind Medicine is 1.74 times more volatile than BioNTech SE. It trades about 0.03 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.07 per unit of risk. If you would invest  684.00  in Mind Medicine on December 27, 2024 and sell it today you would lose (6.00) from holding Mind Medicine or give up 0.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Mind Medicine  vs.  BioNTech SE

Mind Medicine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mind Medicine are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Mind Medicine may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mind Medicine and BioNTech

The main advantage of trading using opposite Mind Medicine and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mind Medicine 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 Mind Medicine 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.