Correlation Between Astrana Health and BioNTech

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

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

Diversification Opportunities for Astrana Health and BioNTech

0.16

Correlation Coefficient

Astrana Health  BioNTech

Average diversification

The 3 months correlation between Astrana and BioNTech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Astrana Health and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Astrana Health 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 Astrana Health 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 Astrana Health i.e., Astrana Health and BioNTech go up and down completely randomly.

Pair Corralation between Astrana Health and BioNTech

Given the investment horizon of 90 days Astrana Health is expected to under-perform the BioNTech. But the stock apears to be less risky and, when comparing its historical volatility, Astrana Health is 1.22 times less risky than BioNTech. The stock trades about -0.57 of its potential returns per unit of risk. The BioNTech SE is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  12,076  in BioNTech SE on September 25, 2024 and sell it today you would lose (663.00) from holding BioNTech SE or give up 5.49% of portfolio value over 90 days.

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

Astrana Health  vs.  BioNTech SE

Astrana Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astrana Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 Astrana Health and BioNTech

The main advantage of trading using opposite Astrana Health and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astrana Health 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 Astrana Health 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.