Correlation Between Celsius Holdings and BioNTech

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

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

Diversification Opportunities for Celsius Holdings and BioNTech

0.39

Correlation Coefficient

Celsius Holdings  BioNTech

Weak diversification

The 3 months correlation between Celsius and BioNTech is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Celsius Holdings 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 Celsius Holdings are associated (or correlated) with BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Celsius Holdings i.e., Celsius Holdings and BioNTech go up and down completely randomly.

Pair Corralation between Celsius Holdings and BioNTech

Given the investment horizon of 90 days Celsius Holdings is expected to under-perform the BioNTech. In addition to that, Celsius Holdings is 1.45 times more volatile than BioNTech SE. It trades about -0.03 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.02 per unit of volatility. If you would invest  10,743  in BioNTech SE on September 30, 2024 and sell it today you would earn a total of  652.00  from holding BioNTech SE or generate 6.07% return on investment over 90 days.

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

Celsius Holdings  vs.  BioNTech SE

Celsius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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.

Pair Trading with Celsius Holdings and BioNTech

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

The idea behind Celsius Holdings and BioNTech SE 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.