Correlation Between GlaxoSmithKline PLC and BioNTech
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC 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 GlaxoSmithKline PLC and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and BioNTech SE, you can compare the effects of market volatilities on GlaxoSmithKline PLC 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 GlaxoSmithKline PLC with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and BioNTech.
Diversification Opportunities for GlaxoSmithKline PLC and BioNTech
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and BioNTech is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and GlaxoSmithKline PLC 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 GlaxoSmithKline PLC ADR 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 GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and BioNTech go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and BioNTech
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the BioNTech. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.06 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 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,349 in BioNTech SE on August 29, 2024 and sell it today you would earn a total of 2,566 from holding BioNTech SE or generate 27.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.58% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. BioNTech SE
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| BioNTech SE |
GlaxoSmithKline PLC and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and BioNTech
The main advantage of trading using opposite GlaxoSmithKline PLC and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC 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.| GlaxoSmithKline PLC vs. Novartis AG ADR | GlaxoSmithKline PLC vs. AstraZeneca PLC ADR | GlaxoSmithKline PLC vs. Roche Holding Ltd | GlaxoSmithKline PLC vs. Bristol Myers Squibb |
| BioNTech vs. Auction Technology Group | BioNTech vs. Ameriprise Financial | BioNTech vs. National Bank of | BioNTech vs. Take Two Interactive Software |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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