Correlation Between Eurofins Scientific and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Eurofins Scientific 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 Eurofins Scientific and Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurofins Scientific SE and Thermo Fisher Scientific, you can compare the effects of market volatilities on Eurofins Scientific 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 Eurofins Scientific with a short position of Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurofins Scientific and Thermo Fisher.
Diversification Opportunities for Eurofins Scientific and Thermo Fisher
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eurofins and Thermo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eurofins Scientific SE 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 Eurofins Scientific 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 Eurofins Scientific SE 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 Eurofins Scientific i.e., Eurofins Scientific and Thermo Fisher go up and down completely randomly.
Pair Corralation between Eurofins Scientific and Thermo Fisher
Assuming the 90 days horizon Eurofins Scientific SE is expected to under-perform the Thermo Fisher. In addition to that, Eurofins Scientific is 3.38 times more volatile than Thermo Fisher Scientific. It trades about -0.02 of its total potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.04 per unit of volatility. If you would invest 57,452 in Thermo Fisher Scientific on September 3, 2024 and sell it today you would lose (4,457) from holding Thermo Fisher Scientific or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eurofins Scientific SE vs. Thermo Fisher Scientific
Performance |
| Timeline |
| Eurofins Scientific |
| Thermo Fisher Scientific |
Eurofins Scientific and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurofins Scientific and Thermo Fisher
The main advantage of trading using opposite Eurofins Scientific and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurofins Scientific 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.| Eurofins Scientific vs. Thermo Fisher Scientific | Eurofins Scientific vs. Illumina | Eurofins Scientific vs. Danaher | Eurofins Scientific vs. Waters |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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