Correlation Between BioInvent International and Epiroc AB

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

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

Diversification Opportunities for BioInvent International and Epiroc AB

-0.16

Correlation Coefficient

BioInvent International  Epiroc AB

Good diversification

The 3 months correlation between BioInvent and Epiroc is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Epiroc AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epiroc AB and BioInvent International 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 BioInvent International AB are associated (or correlated) with Epiroc AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epiroc AB has no effect on the direction of BioInvent International i.e., BioInvent International and Epiroc AB go up and down completely randomly.

Pair Corralation between BioInvent International and Epiroc AB

Assuming the 90 days trading horizon BioInvent International AB is expected to generate 2.73 times more return on investment than Epiroc AB. However, BioInvent International is 2.73 times more volatile than Epiroc AB. It trades about 0.14 of its potential returns per unit of risk. Epiroc AB is currently generating about 0.02 per unit of risk. If you would invest  2,930  in BioInvent International AB on April 25, 2025 and sell it today you would earn a total of  1,120  from holding BioInvent International AB or generate 38.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BioInvent International AB  vs.  Epiroc AB

BioInvent International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioInvent International AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BioInvent International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Epiroc AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Epiroc AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Epiroc AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BioInvent International and Epiroc AB

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

The idea behind BioInvent International AB and Epiroc AB 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.