Correlation Between Illumina and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Illumina 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 Illumina and Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Illumina and Thermo Fisher Scientific, you can compare the effects of market volatilities on Illumina 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 Illumina with a short position of Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Illumina and Thermo Fisher.
Diversification Opportunities for Illumina and Thermo Fisher
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Illumina and Thermo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Illumina 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 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 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 Illumina i.e., Illumina and Thermo Fisher go up and down completely randomly.
Pair Corralation between Illumina and Thermo Fisher
Assuming the 90 days horizon Illumina is expected to generate 1.71 times more return on investment than Thermo Fisher. However, Illumina is 1.71 times more volatile than Thermo Fisher Scientific. It trades about 0.15 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.08 per unit of risk. If you would invest 11,210 in Illumina on September 12, 2024 and sell it today you would earn a total of 2,790 from holding Illumina or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Illumina vs. Thermo Fisher Scientific
Performance |
| Timeline |
| Illumina |
| Thermo Fisher Scientific |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Illumina and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Illumina and Thermo Fisher
The main advantage of trading using opposite Illumina and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Illumina 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.| Illumina vs. Electronic Arts | Illumina vs. FIREWEED METALS P | Illumina vs. STMicroelectronics NV | Illumina vs. Kaiser Aluminum |
| Thermo Fisher vs. TYSON FOODS A | Thermo Fisher vs. COFCO Joycome Foods | Thermo Fisher vs. Infrastrutture Wireless Italiane | Thermo Fisher vs. Ebro Foods SA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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