Correlation Between BioNTech and Vertex Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both BioNTech and Vertex Pharmaceuticals 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 Vertex Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Vertex Pharmaceuticals, you can compare the effects of market volatilities on BioNTech and Vertex Pharmaceuticals 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 Vertex Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Vertex Pharmaceuticals.
Diversification Opportunities for BioNTech and Vertex Pharmaceuticals
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BioNTech and Vertex is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Vertex Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertex Pharmaceuticals 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 Vertex Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertex Pharmaceuticals has no effect on the direction of BioNTech i.e., BioNTech and Vertex Pharmaceuticals go up and down completely randomly.
Pair Corralation between BioNTech and Vertex Pharmaceuticals
Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Vertex Pharmaceuticals. In addition to that, BioNTech is 1.88 times more volatile than Vertex Pharmaceuticals. It trades about -0.01 of its total potential returns per unit of risk. Vertex Pharmaceuticals is currently generating about 0.46 per unit of volatility. If you would invest 41,211 in Vertex Pharmaceuticals on November 9, 2024 and sell it today you would earn a total of 6,905 from holding Vertex Pharmaceuticals or generate 16.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. Vertex Pharmaceuticals
Performance |
| Timeline |
| BioNTech SE |
| Vertex Pharmaceuticals |
BioNTech and Vertex Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and Vertex Pharmaceuticals
The main advantage of trading using opposite BioNTech and Vertex Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Vertex Pharmaceuticals 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 Vertex Pharmaceuticals will offset losses from the drop in Vertex Pharmaceuticals' long position.| BioNTech vs. Novavax | BioNTech vs. Ginkgo Bioworks Holdings | BioNTech vs. Crispr Therapeutics AG | BioNTech vs. Ocean Biomedical |
| Vertex Pharmaceuticals vs. Biomarin Pharmaceutical | Vertex Pharmaceuticals vs. Sarepta Therapeutics | Vertex Pharmaceuticals vs. Alnylam Pharmaceuticals | Vertex Pharmaceuticals vs. Intellia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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