Correlation Between PT Bank and BioNTech

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

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

Diversification Opportunities for PT Bank and BioNTech

-0.45

Correlation Coefficient

PT Bank  BioNTech

Very good diversification

The 3 months correlation between PQ9 and BioNTech is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and PT Bank 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 PT Bank Mandiri 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 PT Bank i.e., PT Bank and BioNTech go up and down completely randomly.

Pair Corralation between PT Bank and BioNTech

Assuming the 90 days horizon PT Bank Mandiri is expected to under-perform the BioNTech. In addition to that, PT Bank is 1.65 times more volatile than BioNTech SE. It trades about -0.02 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.04 per unit of volatility. If you would invest  10,390  in BioNTech SE on October 24, 2024 and sell it today you would earn a total of  550.00  from holding BioNTech SE or generate 5.29% return on investment over 90 days.

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

PT Bank Mandiri  vs.  BioNTech SE

PT Bank Mandiri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Mandiri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BioNTech SE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PT Bank and BioNTech

The main advantage of trading using opposite PT Bank and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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 PT Bank Mandiri 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.