Correlation Between China New and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both China New and Thermo Fisher 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 China New and Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China New Energy and Thermo Fisher Scientific, you can compare the effects of market volatilities on China New and Thermo Fisher 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 China New with a short position of Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of China New and Thermo Fisher.
Diversification Opportunities for China New and Thermo Fisher
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Thermo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding China New Energy and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific and China New 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 China New Energy are associated (or correlated) with Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of China New i.e., China New and Thermo Fisher go up and down completely randomly.
Pair Corralation between China New and Thermo Fisher
Given the investment horizon of 90 days China New Energy is expected to generate 21.21 times more return on investment than Thermo Fisher. However, China New is 21.21 times more volatile than Thermo Fisher Scientific. It trades about 0.06 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about 0.0 per unit of risk. If you would invest 3.10 in China New Energy on November 27, 2024 and sell it today you would lose (2.60) from holding China New Energy or give up 83.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China New Energy vs. Thermo Fisher Scientific
Performance |
| Timeline |
| China New Energy |
| Thermo Fisher Scientific |
China New and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China New and Thermo Fisher
The main advantage of trading using opposite China New and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China New position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher's long position.| China New vs. Sonic Healthcare Ltd | China New vs. Lonza Group | China New vs. Charles River Laboratories | China New vs. Qiagen NV |
| Thermo Fisher vs. Agilent Technologies | Thermo Fisher vs. IDEXX Laboratories | Thermo Fisher vs. Illumina | Thermo Fisher vs. Waters |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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