Correlation Between Illumina and Eurofins Scientific
Can any of the company-specific risk be diversified away by investing in both Illumina and Eurofins Scientific 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 Illumina and Eurofins Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Illumina and Eurofins Scientific SE, you can compare the effects of market volatilities on Illumina and Eurofins Scientific 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 Illumina with a short position of Eurofins Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Illumina and Eurofins Scientific.
Diversification Opportunities for Illumina and Eurofins Scientific
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Illumina and Eurofins is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Illumina and Eurofins Scientific SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurofins Scientific and Illumina 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 Illumina are associated (or correlated) with Eurofins Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurofins Scientific has no effect on the direction of Illumina i.e., Illumina and Eurofins Scientific go up and down completely randomly.
Pair Corralation between Illumina and Eurofins Scientific
Given the investment horizon of 90 days Illumina is expected to under-perform the Eurofins Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Illumina is 1.32 times less risky than Eurofins Scientific. The stock trades about -0.05 of its potential returns per unit of risk. The Eurofins Scientific SE is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,941 in Eurofins Scientific SE on November 3, 2024 and sell it today you would earn a total of 451.00 from holding Eurofins Scientific SE or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Illumina vs. Eurofins Scientific SE
Performance |
| Timeline |
| Illumina |
| Eurofins Scientific |
Illumina and Eurofins Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Illumina and Eurofins Scientific
The main advantage of trading using opposite Illumina and Eurofins Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Illumina position performs unexpectedly, Eurofins Scientific 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 Eurofins Scientific will offset losses from the drop in Eurofins Scientific's long position.| Illumina vs. Thermo Fisher Scientific | Illumina vs. Danaher | Illumina vs. Waters | Illumina vs. IDEXX Laboratories |
| Eurofins Scientific vs. Thermo Fisher Scientific | Eurofins Scientific vs. Illumina | Eurofins Scientific vs. Danaher | Eurofins Scientific 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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