Correlation Between BIONTECH and Ascendis Pharma

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

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

Diversification Opportunities for BIONTECH and Ascendis Pharma

0.61

Correlation Coefficient

BIONTECH  Ascendis Pharma

Poor diversification

The 3 months correlation between BIONTECH and Ascendis is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma AS and BIONTECH 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 BIONTECH SE DRN are associated (or correlated) with Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of BIONTECH i.e., BIONTECH and Ascendis Pharma go up and down completely randomly.

Pair Corralation between BIONTECH and Ascendis Pharma

Assuming the 90 days trading horizon BIONTECH is expected to generate 8.49 times less return on investment than Ascendis Pharma. In addition to that, BIONTECH is 1.04 times more volatile than Ascendis Pharma AS. It trades about 0.02 of its total potential returns per unit of risk. Ascendis Pharma AS is currently generating about 0.18 per unit of volatility. If you would invest  4,884  in Ascendis Pharma AS on September 24, 2024 and sell it today you would earn a total of  451.00  from holding Ascendis Pharma AS or generate 9.23% return on investment over 90 days.

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

BIONTECH SE DRN  vs.  Ascendis Pharma AS

BIONTECH SE DRN

Risk-Adjusted Performance

4 of 100

Modest

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

Ascendis Pharma AS

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with BIONTECH and Ascendis Pharma

The main advantage of trading using opposite BIONTECH and Ascendis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, Ascendis Pharma 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 Ascendis Pharma will offset losses from the drop in Ascendis Pharma's long position.

The idea behind BIONTECH SE DRN and Ascendis Pharma AS 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.