Correlation Between BioNTech and Ardelyx

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

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

Diversification Opportunities for BioNTech and Ardelyx

0.45

Correlation Coefficient

BioNTech  Ardelyx

Very weak diversification

The 3 months correlation between BioNTech and Ardelyx is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Ardelyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardelyx 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 are associated (or correlated) with Ardelyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardelyx has no effect on the direction of BioNTech i.e., BioNTech and Ardelyx go up and down completely randomly.

Pair Corralation between BioNTech and Ardelyx

Given the investment horizon of 90 days BioNTech SE is expected to generate 0.61 times more return on investment than Ardelyx. However, BioNTech SE is 1.63 times less risky than Ardelyx. It trades about 0.08 of its potential returns per unit of risk. Ardelyx is currently generating about 0.0 per unit of risk. If you would invest  9,208  in BioNTech SE on September 12, 2024 and sell it today you would earn a total of  2,708  from holding BioNTech SE or generate 29.41% return on investment over 90 days.

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

BioNTech SE  vs.  Ardelyx

BioNTech SE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech showed solid returns over the last few months and may actually be approaching a breakup point.

Ardelyx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardelyx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BioNTech and Ardelyx

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

The idea behind BioNTech SE and Ardelyx 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.