Correlation Between DANAHER and BioNTech

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

By analyzing existing cross correlation between DANAHER P 4375 and BioNTech SE, you can compare the effects of market volatilities on DANAHER 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 DANAHER with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DANAHER and BioNTech.

Diversification Opportunities for DANAHER and BioNTech

-0.06

Correlation Coefficient

DANAHER  BioNTech

Good diversification

The 3 months correlation between DANAHER and BioNTech is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding DANAHER P 4375 and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and DANAHER 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 DANAHER P 4375 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 DANAHER i.e., DANAHER and BioNTech go up and down completely randomly.

Pair Corralation between DANAHER and BioNTech

Assuming the 90 days trading horizon DANAHER P 4375 is expected to under-perform the BioNTech. In addition to that, DANAHER is 16.07 times more volatile than BioNTech SE. It trades about -0.44 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.1 per unit of volatility. If you would invest  12,082  in BioNTech SE on October 10, 2024 and sell it today you would earn a total of  606.00  from holding BioNTech SE or generate 5.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.57%
Values	Daily Returns

DANAHER P 4375  vs.  BioNTech SE

DANAHER P 4375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DANAHER P 4375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for DANAHER P 4375 investors.

BioNTech SE

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with DANAHER and BioNTech

The main advantage of trading using opposite DANAHER and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DANAHER 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 DANAHER P 4375 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..