Correlation Between Seres Therapeutics and BioNTech
Can any of the company-specific risk be diversified away by investing in both Seres 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 Seres Therapeutics and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and BioNTech SE, you can compare the effects of market volatilities on Seres 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 Seres Therapeutics with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and BioNTech.
Diversification Opportunities for Seres Therapeutics and BioNTech
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seres and BioNTech is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Seres 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 Seres 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 Seres Therapeutics i.e., Seres Therapeutics and BioNTech go up and down completely randomly.
Pair Corralation between Seres Therapeutics and BioNTech
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 2.2 times more return on investment than BioNTech. However, Seres Therapeutics is 2.2 times more volatile than BioNTech SE. It trades about 0.14 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.08 per unit of risk. If you would invest 82.00 in Seres Therapeutics on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Seres Therapeutics or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. BioNTech SE
Performance |
| Timeline |
| Seres Therapeutics |
| BioNTech SE |
Seres Therapeutics and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and BioNTech
The main advantage of trading using opposite Seres Therapeutics and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres 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.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| BioNTech vs. Novavax | BioNTech vs. Ginkgo Bioworks Holdings | BioNTech vs. Crispr Therapeutics AG | BioNTech vs. Ocean Biomedical |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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