Correlation Between Thermo Fisher and Danaher
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher and Danaher 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 Thermo Fisher and Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thermo Fisher Scientific and Danaher, you can compare the effects of market volatilities on Thermo Fisher and Danaher 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 Thermo Fisher with a short position of Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Danaher.
Diversification Opportunities for Thermo Fisher and Danaher
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thermo and Danaher is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher and Thermo Fisher 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 Thermo Fisher Scientific are associated (or correlated) with Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and Danaher go up and down completely randomly.
Pair Corralation between Thermo Fisher and Danaher
Assuming the 90 days trading horizon Thermo Fisher Scientific is expected to generate 0.61 times more return on investment than Danaher. However, Thermo Fisher Scientific is 1.63 times less risky than Danaher. It trades about 0.26 of its potential returns per unit of risk. Danaher is currently generating about -0.09 per unit of risk. If you would invest 1,096,000 in Thermo Fisher Scientific on November 7, 2024 and sell it today you would earn a total of 97,727 from holding Thermo Fisher Scientific or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thermo Fisher Scientific vs. Danaher
Performance |
| Timeline |
| Thermo Fisher Scientific |
| Danaher |
Thermo Fisher and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermo Fisher and Danaher
The main advantage of trading using opposite Thermo Fisher and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| Thermo Fisher vs. Samsung Electronics Co | Thermo Fisher vs. Air Transport Services | Thermo Fisher vs. Steel Dynamics | Thermo Fisher vs. Southern Copper |
| Danaher vs. Air Transport Services | Danaher vs. First Republic Bank | Danaher vs. Desarrolladora Homex SAB | Danaher vs. Grupo Industrial Saltillo |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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