Correlation Between Thermo Fisher and Eurofins Scientific
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher 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 Thermo Fisher and Eurofins Scientific 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 Eurofins Scientific SE, you can compare the effects of market volatilities on Thermo Fisher 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 Thermo Fisher with a short position of Eurofins Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Eurofins Scientific.
Diversification Opportunities for Thermo Fisher and Eurofins Scientific
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thermo and Eurofins is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and Eurofins Scientific SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurofins Scientific 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 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 Thermo Fisher i.e., Thermo Fisher and Eurofins Scientific go up and down completely randomly.
Pair Corralation between Thermo Fisher and Eurofins Scientific
Considering the 90-day investment horizon Thermo Fisher Scientific is expected to generate 0.53 times more return on investment than Eurofins Scientific. However, Thermo Fisher Scientific is 1.9 times less risky than Eurofins Scientific. It trades about 0.18 of its potential returns per unit of risk. Eurofins Scientific SE is currently generating about 0.09 per unit of risk. If you would invest 53,402 in Thermo Fisher Scientific on November 3, 2024 and sell it today you would earn a total of 6,373 from holding Thermo Fisher Scientific or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermo Fisher Scientific vs. Eurofins Scientific SE
Performance |
| Timeline |
| Thermo Fisher Scientific |
| Eurofins Scientific |
Thermo Fisher and Eurofins Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermo Fisher and Eurofins Scientific
The main advantage of trading using opposite Thermo Fisher and Eurofins Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher 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.| Thermo Fisher vs. Agilent Technologies | Thermo Fisher vs. IDEXX Laboratories | Thermo Fisher vs. Illumina | Thermo Fisher vs. Waters |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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