Correlation Between Novavax and BioNTech
Can any of the company-specific risk be diversified away by investing in both Novavax 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 Novavax and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novavax and BioNTech SE, you can compare the effects of market volatilities on Novavax 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 Novavax with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novavax and BioNTech.
Diversification Opportunities for Novavax and BioNTech
Very weak diversification
The 3 months correlation between Novavax and BioNTech is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Novavax and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Novavax 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 Novavax 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 Novavax i.e., Novavax and BioNTech go up and down completely randomly.
Pair Corralation between Novavax and BioNTech
Given the investment horizon of 90 days Novavax is expected to generate 1.37 times more return on investment than BioNTech. However, Novavax is 1.37 times more volatile than BioNTech SE. It trades about 0.05 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.06 per unit of risk. If you would invest 667.00 in Novavax on April 30, 2025 and sell it today you would earn a total of 61.00 from holding Novavax or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novavax vs. BioNTech SE
Performance |
| Timeline |
| Novavax |
| BioNTech SE |
Novavax and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novavax and BioNTech
The main advantage of trading using opposite Novavax and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novavax 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.| Novavax vs. Moderna | Novavax vs. Inovio Pharmaceuticals | Novavax vs. BioNTech SE | Novavax vs. AstraZeneca PLC ADR |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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