Correlation Between Weibo Corp and BioNTech

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

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

Diversification Opportunities for Weibo Corp and BioNTech

0.53

Correlation Coefficient

Weibo Corp  BioNTech

Very weak diversification

The 3 months correlation between Weibo and BioNTech is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and BioNTech go up and down completely randomly.

Pair Corralation between Weibo Corp and BioNTech

Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the BioNTech. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 1.37 times less risky than BioNTech. The stock trades about -0.02 of its potential returns per unit of risk. The BioNTech SE is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  11,134  in BioNTech SE on October 20, 2024 and sell it today you would earn a total of  59.00  from holding BioNTech SE or generate 0.53% return on investment over 90 days.

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

Weibo Corp  vs.  BioNTech SE

Weibo Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weibo Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Weibo Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BioNTech SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, BioNTech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Weibo Corp and BioNTech

The main advantage of trading using opposite Weibo Corp and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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 Weibo Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.