Correlation Between Biontech and Moderna

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Can any of the company-specific risk be diversified away by investing in both Biontech and Moderna 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 Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biontech Se ADR and Moderna, you can compare the effects of market volatilities on Biontech and Moderna 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 Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biontech and Moderna.

Diversification Opportunities for Biontech and Moderna

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Biontech and Moderna is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Biontech Se ADR and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 ADR are associated (or correlated) with Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Biontech i.e., Biontech and Moderna go up and down completely randomly.

Pair Corralation between Biontech and Moderna

Given the investment horizon of 90 days Biontech Se ADR is expected to generate 0.98 times more return on investment than Moderna. However, Biontech Se ADR is 1.02 times less risky than Moderna. It trades about -0.03 of its potential returns per unit of risk. Moderna is currently generating about -0.05 per unit of risk. If you would invest  22,116  in Biontech Se ADR on April 4, 2022 and sell it today you would lose (6,366)  from holding Biontech Se ADR or give up 28.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Biontech Se ADR  vs.  Moderna

 Performance (%) 
      Timeline 
Biontech Se ADR 
Biontech Performance
0 of 100
Over the last 90 days Biontech Se ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0133
Payout Ratio
0.0395
Forward Annual Dividend Rate
2.11
Dividend Date
2022-06-17
Ex Dividend Date
2022-06-02

Biontech Price Channel

Moderna 
Moderna Performance
0 of 100
Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Moderna Price Channel

Biontech and Moderna Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Biontech and Moderna

The main advantage of trading using opposite Biontech and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biontech position performs unexpectedly, Moderna 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 Moderna will offset losses from the drop in Moderna's long position.

Biontech Se ADR

Pair trading matchups for Biontech

The idea behind Biontech Se ADR and Moderna 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.

Moderna

Pair trading matchups for Moderna

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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