Correlation Between Immune Therapeutics and BioNTech

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

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

Diversification Opportunities for Immune Therapeutics and BioNTech

0.48

Correlation Coefficient

Immune Therapeutics  BioNTech

Very weak diversification

The 3 months correlation between Immune and BioNTech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Immune Therapeutics and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Immune Therapeutics 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 Immune Therapeutics 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 Immune Therapeutics i.e., Immune Therapeutics and BioNTech go up and down completely randomly.

Pair Corralation between Immune Therapeutics and BioNTech

If you would invest  6.00  in Immune Therapeutics on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Immune Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Immune Therapeutics  vs.  BioNTech SE

Immune Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immune Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Immune Therapeutics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the 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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Immune Therapeutics and BioNTech

The main advantage of trading using opposite Immune Therapeutics and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immune Therapeutics 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 Immune Therapeutics 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.