Correlation Between BioNTech and Bright Minds
Can any of the company-specific risk be diversified away by investing in both BioNTech and Bright Minds 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 Bright Minds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Bright Minds Biosciences, you can compare the effects of market volatilities on BioNTech and Bright Minds 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 Bright Minds. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Bright Minds.
Diversification Opportunities for BioNTech and Bright Minds
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BioNTech and Bright is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Bright Minds Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Minds Biosciences 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 Bright Minds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Minds Biosciences has no effect on the direction of BioNTech i.e., BioNTech and Bright Minds go up and down completely randomly.
Pair Corralation between BioNTech and Bright Minds
Given the investment horizon of 90 days BioNTech SE is expected to generate 0.54 times more return on investment than Bright Minds. However, BioNTech SE is 1.85 times less risky than Bright Minds. It trades about 0.1 of its potential returns per unit of risk. Bright Minds Biosciences is currently generating about -0.1 per unit of risk. If you would invest 11,326 in BioNTech SE on August 29, 2024 and sell it today you would earn a total of 746.00 from holding BioNTech SE or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. Bright Minds Biosciences
Performance |
| Timeline |
| BioNTech SE |
| Bright Minds Biosciences |
BioNTech and Bright Minds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and Bright Minds
The main advantage of trading using opposite BioNTech and Bright Minds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Bright Minds 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 Bright Minds will offset losses from the drop in Bright Minds' long position.The idea behind BioNTech SE and Bright Minds Biosciences 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.| Bright Minds vs. Revelation Biosciences | Bright Minds vs. Zura Bio Limited | Bright Minds vs. Phio Pharmaceuticals Corp | Bright Minds vs. ZyVersa Therapeutics |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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