Correlation Between Tscan Therapeutics and BioNTech

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

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

Diversification Opportunities for Tscan Therapeutics and BioNTech

-0.1

Correlation Coefficient

Tscan Therapeutics  BioNTech

Good diversification

The 3 months correlation between Tscan and BioNTech is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tscan Therapeutics and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Tscan Therapeutics 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 Tscan Therapeutics 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 Tscan Therapeutics i.e., Tscan Therapeutics and BioNTech go up and down completely randomly.

Pair Corralation between Tscan Therapeutics and BioNTech

Given the investment horizon of 90 days Tscan Therapeutics is expected to under-perform the BioNTech. But the stock apears to be less risky and, when comparing its historical volatility, Tscan Therapeutics is 1.03 times less risky than BioNTech. The stock trades about -0.04 of its potential returns per unit of risk. The BioNTech SE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8,902  in BioNTech SE on September 4, 2024 and sell it today you would earn a total of  2,818  from holding BioNTech SE or generate 31.66% return on investment over 90 days.

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

Tscan Therapeutics  vs.  BioNTech SE

Tscan Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tscan Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

BioNTech SE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tscan Therapeutics and BioNTech

The main advantage of trading using opposite Tscan Therapeutics and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tscan Therapeutics 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 Tscan Therapeutics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.