Correlation Between BioNTech and Entegris

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

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

Diversification Opportunities for BioNTech and Entegris

0.57

Correlation Coefficient

BioNTech  Entegris

Very weak diversification

The 3 months correlation between BioNTech and Entegris is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris 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 Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of BioNTech i.e., BioNTech and Entegris go up and down completely randomly.

Pair Corralation between BioNTech and Entegris

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Entegris. In addition to that, BioNTech is 1.1 times more volatile than Entegris. It trades about -0.01 of its total potential returns per unit of risk. Entegris is currently generating about 0.0 per unit of volatility. If you would invest  11,057  in Entegris on September 13, 2024 and sell it today you would lose (150.00) from holding Entegris or give up 1.36% of portfolio value over 90 days.

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

BioNTech SE  vs.  Entegris

BioNTech SE

Risk-Adjusted Performance

0 of 100

Modest

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Entegris

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Entegris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Entegris is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BioNTech and Entegris

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

The idea behind BioNTech SE and Entegris 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.