Correlation Between Wheaton Precious and BioNTech

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

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

Diversification Opportunities for Wheaton Precious and BioNTech

0.14

Correlation Coefficient

Wheaton Precious  BioNTech

Average diversification

The 3 months correlation between Wheaton and BioNTech is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and BioNTech go up and down completely randomly.

Pair Corralation between Wheaton Precious and BioNTech

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 0.79 times more return on investment than BioNTech. However, Wheaton Precious Metals is 1.27 times less risky than BioNTech. It trades about 0.05 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.02 per unit of risk. If you would invest  485,000  in Wheaton Precious Metals on December 2, 2024 and sell it today you would earn a total of  29,000  from holding Wheaton Precious Metals or generate 5.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Wheaton Precious Metals  vs.  BioNTech SE

Wheaton Precious Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Wheaton Precious 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. Despite quite persistent essential indicators, BioNTech is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Wheaton Precious and BioNTech

The main advantage of trading using opposite Wheaton Precious and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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 Wheaton Precious Metals 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.