Correlation Between BioNTech and Mink Therapeutics

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

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

Diversification Opportunities for BioNTech and Mink Therapeutics

-0.1

Correlation Coefficient

BioNTech  Mink Therapeutics

Good diversification

The 3 months correlation between BioNTech and Mink is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Mink Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mink Therapeutics 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 Mink Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mink Therapeutics has no effect on the direction of BioNTech i.e., BioNTech and Mink Therapeutics go up and down completely randomly.

Pair Corralation between BioNTech and Mink Therapeutics

Given the investment horizon of 90 days BioNTech SE is expected to generate 0.46 times more return on investment than Mink Therapeutics. However, BioNTech SE is 2.17 times less risky than Mink Therapeutics. It trades about -0.07 of its potential returns per unit of risk. Mink Therapeutics is currently generating about -0.26 per unit of risk. If you would invest  11,854  in BioNTech SE on September 27, 2024 and sell it today you would lose (441.00) from holding BioNTech SE or give up 3.72% of portfolio value over 90 days.

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

BioNTech SE  vs.  Mink Therapeutics

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

Mink Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mink Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BioNTech and Mink Therapeutics

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

The idea behind BioNTech SE and Mink Therapeutics 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.