Correlation Between Arcus Biosciences and BioNTech
Can any of the company-specific risk be diversified away by investing in both Arcus Biosciences 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 Arcus Biosciences and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcus Biosciences and BioNTech SE, you can compare the effects of market volatilities on Arcus Biosciences 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 Arcus Biosciences with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcus Biosciences and BioNTech.
Diversification Opportunities for Arcus Biosciences and BioNTech
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arcus and BioNTech is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Arcus Biosciences and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Arcus Biosciences 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 Arcus Biosciences 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 Arcus Biosciences i.e., Arcus Biosciences and BioNTech go up and down completely randomly.
Pair Corralation between Arcus Biosciences and BioNTech
Given the investment horizon of 90 days Arcus Biosciences is expected to under-perform the BioNTech. In addition to that, Arcus Biosciences is 1.05 times more volatile than BioNTech SE. It trades about -0.35 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.05 per unit of volatility. If you would invest 12,069 in BioNTech SE on October 13, 2024 and sell it today you would earn a total of 216.00 from holding BioNTech SE or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcus Biosciences vs. BioNTech SE
Performance |
| Timeline |
| Arcus Biosciences |
| BioNTech SE |
Arcus Biosciences and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcus Biosciences and BioNTech
The main advantage of trading using opposite Arcus Biosciences and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcus Biosciences 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.| Arcus Biosciences vs. Cullinan Oncology LLC | Arcus Biosciences vs. Annexon | Arcus Biosciences vs. Structure Therapeutics American | Arcus Biosciences vs. Relay 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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