Correlation Between Takeda Pharmaceutical and BioNTech

Can any of the company-specific risk be diversified away by investing in both Takeda Pharmaceutical 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 Takeda Pharmaceutical and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Takeda Pharmaceutical and BioNTech SE, you can compare the effects of market volatilities on Takeda Pharmaceutical 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 Takeda Pharmaceutical with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Takeda Pharmaceutical and BioNTech.

Diversification Opportunities for Takeda Pharmaceutical and BioNTech

0.29

Correlation Coefficient

Takeda Pharmaceutical  BioNTech

Modest diversification

The 3 months correlation between Takeda and BioNTech is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Takeda Pharmaceutical and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Takeda Pharmaceutical 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 Takeda Pharmaceutical 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 Takeda Pharmaceutical i.e., Takeda Pharmaceutical and BioNTech go up and down completely randomly.

Pair Corralation between Takeda Pharmaceutical and BioNTech

Assuming the 90 days horizon Takeda Pharmaceutical is expected to under-perform the BioNTech. But the stock apears to be less risky and, when comparing its historical volatility, Takeda Pharmaceutical is 2.8 times less risky than BioNTech. The stock trades about -0.09 of its potential returns per unit of risk. The BioNTech SE is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  10,220  in BioNTech SE on April 24, 2025 and sell it today you would lose (845.00) from holding BioNTech SE or give up 8.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Takeda Pharmaceutical  vs.  BioNTech SE

Takeda Pharmaceutical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Takeda Pharmaceutical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BioNTech SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BioNTech is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Takeda Pharmaceutical and BioNTech

The main advantage of trading using opposite Takeda Pharmaceutical and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Takeda Pharmaceutical 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.

The idea behind Takeda Pharmaceutical and BioNTech SE 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.