Correlation Between Western Union and BioNTech

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

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

Diversification Opportunities for Western Union and BioNTech

0.44

Correlation Coefficient

Western Union  BioNTech

Very weak diversification

The 3 months correlation between Western and BioNTech is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Western Union 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 Western Union Co 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 Western Union i.e., Western Union and BioNTech go up and down completely randomly.

Pair Corralation between Western Union and BioNTech

Allowing for the 90-day total investment horizon Western Union is expected to generate 3.38 times less return on investment than BioNTech. But when comparing it to its historical volatility, Western Union Co is 3.19 times less risky than BioNTech. It trades about 0.12 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  11,148  in BioNTech SE on September 14, 2024 and sell it today you would earn a total of  921.00  from holding BioNTech SE or generate 8.26% return on investment over 90 days.

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

Western Union Co  vs.  BioNTech SE

Western Union

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

BioNTech SE

Risk-Adjusted Performance

0 of 100

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 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 Western Union and BioNTech

The main advantage of trading using opposite Western Union and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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 Western Union Co 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.