Correlation Between Thermo Fisher and Guardant Health
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher and Guardant Health 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 Guardant Health 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 Guardant Health, you can compare the effects of market volatilities on Thermo Fisher and Guardant Health 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 Guardant Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Guardant Health.
Diversification Opportunities for Thermo Fisher and Guardant Health
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thermo and Guardant is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health 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 Guardant Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardant Health has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and Guardant Health go up and down completely randomly.
Pair Corralation between Thermo Fisher and Guardant Health
Considering the 90-day investment horizon Thermo Fisher is expected to generate 3.32 times less return on investment than Guardant Health. But when comparing it to its historical volatility, Thermo Fisher Scientific is 2.95 times less risky than Guardant Health. It trades about 0.42 of its potential returns per unit of risk. Guardant Health is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 3,055 in Guardant Health on November 1, 2024 and sell it today you would earn a total of 1,939 from holding Guardant Health or generate 63.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermo Fisher Scientific vs. Guardant Health
Performance |
| Timeline |
| Thermo Fisher Scientific |
| Guardant Health |
Thermo Fisher and Guardant Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermo Fisher and Guardant Health
The main advantage of trading using opposite Thermo Fisher and Guardant Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher position performs unexpectedly, Guardant Health 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 Guardant Health will offset losses from the drop in Guardant Health's long position.| Thermo Fisher vs. Agilent Technologies | Thermo Fisher vs. IDEXX Laboratories | Thermo Fisher vs. Illumina | Thermo Fisher vs. Waters |
| Guardant Health vs. Illumina | Guardant Health vs. Twist Bioscience Corp | Guardant Health vs. Natera Inc | Guardant Health vs. Caredx Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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