Correlation Between BioNTech and WESTROCK

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

By analyzing existing cross correlation between BioNTech SE and WESTROCK 4 percent, you can compare the effects of market volatilities on BioNTech and WESTROCK 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 WESTROCK. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and WESTROCK.

Diversification Opportunities for BioNTech and WESTROCK

0.29

Correlation Coefficient

BioNTech  WESTROCK

Modest diversification

The 3 months correlation between BioNTech and WESTROCK is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and WESTROCK 4 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTROCK 4 percent 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 WESTROCK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTROCK 4 percent has no effect on the direction of BioNTech i.e., BioNTech and WESTROCK go up and down completely randomly.

Pair Corralation between BioNTech and WESTROCK

Given the investment horizon of 90 days BioNTech SE is expected to generate 5.5 times more return on investment than WESTROCK. However, BioNTech is 5.5 times more volatile than WESTROCK 4 percent. It trades about 0.0 of its potential returns per unit of risk. WESTROCK 4 percent is currently generating about -0.1 per unit of risk. If you would invest  12,347  in BioNTech SE on September 16, 2024 and sell it today you would lose (309.00) from holding BioNTech SE or give up 2.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.77%
Values	Daily Returns

BioNTech SE  vs.  WESTROCK 4 percent

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.

WESTROCK 4 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WESTROCK 4 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, WESTROCK is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BioNTech and WESTROCK

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

The idea behind BioNTech SE and WESTROCK 4 percent 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..