Correlation Between EPIRUS Biopharmaceutica and WuXi Biologics

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

By analyzing existing cross correlation between EPIRUS Biopharmaceuticals and WuXi Biologics, you can compare the effects of market volatilities on EPIRUS Biopharmaceutica and WuXi Biologics 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 EPIRUS Biopharmaceutica with a short position of WuXi Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPIRUS Biopharmaceutica and WuXi Biologics.

Diversification Opportunities for EPIRUS Biopharmaceutica and WuXi Biologics

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Correlation Coefficient

EPIRUS Biopharmaceutica  WuXi Biologics

Pay attention - limited upside

The 3 months correlation between EPIRUS and WuXi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPIRUS Biopharmaceuticals and WuXi Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Biologics and EPIRUS Biopharmaceutica 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 EPIRUS Biopharmaceuticals are associated (or correlated) with WuXi Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Biologics has no effect on the direction of EPIRUS Biopharmaceutica i.e., EPIRUS Biopharmaceutica and WuXi Biologics go up and down completely randomly.

Pair Corralation between EPIRUS Biopharmaceutica and WuXi Biologics

If you would invest  0.01  in EPIRUS Biopharmaceuticals on January 18, 2024 and sell it today you would earn a total of  0.00  from holding EPIRUS Biopharmaceuticals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

EPIRUS Biopharmaceuticals  vs.  WuXi Biologics

EPIRUS Biopharmaceuticals

Risk-Adjusted Performance

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Very Weak

Over the last 90 days EPIRUS Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, EPIRUS Biopharmaceutica is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

WuXi Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WuXi Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with EPIRUS Biopharmaceutica and WuXi Biologics

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

The idea behind EPIRUS Biopharmaceuticals and WuXi Biologics 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.