Correlation Between BioNTech and SL Green

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

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

Diversification Opportunities for BioNTech and SL Green

-0.53

Correlation Coefficient

BioNTech  SL Green

Excellent diversification

The 3 months correlation between BioNTech and SLG is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of BioNTech i.e., BioNTech and SL Green go up and down completely randomly.

Pair Corralation between BioNTech and SL Green

Given the investment horizon of 90 days BioNTech is expected to generate 2.49 times less return on investment than SL Green. In addition to that, BioNTech is 1.14 times more volatile than SL Green Realty. It trades about 0.04 of its total potential returns per unit of risk. SL Green Realty is currently generating about 0.1 per unit of volatility. If you would invest  4,363  in SL Green Realty on September 15, 2024 and sell it today you would earn a total of  3,100  from holding SL Green Realty or generate 71.05% return on investment over 90 days.

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

BioNTech SE  vs.  SL Green Realty

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

SL Green Realty

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, SL Green may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BioNTech and SL Green

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

The idea behind BioNTech SE and SL Green Realty 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.