Correlation Between Thermo Fisher and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher and Agilent Technologies 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 Agilent Technologies 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 Agilent Technologies, you can compare the effects of market volatilities on Thermo Fisher and Agilent Technologies 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 Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Agilent Technologies.
Diversification Opportunities for Thermo Fisher and Agilent Technologies
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thermo and Agilent is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies 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 Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and Agilent Technologies go up and down completely randomly.
Pair Corralation between Thermo Fisher and Agilent Technologies
Assuming the 90 days trading horizon Thermo Fisher Scientific is expected to generate 0.75 times more return on investment than Agilent Technologies. However, Thermo Fisher Scientific is 1.34 times less risky than Agilent Technologies. It trades about -0.07 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.22 per unit of risk. If you would invest 6,558 in Thermo Fisher Scientific on December 13, 2024 and sell it today you would lose (323.00) from holding Thermo Fisher Scientific or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermo Fisher Scientific vs. Agilent Technologies
Performance |
| Timeline |
| Thermo Fisher Scientific |
| Agilent Technologies |
Thermo Fisher and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermo Fisher and Agilent Technologies
The main advantage of trading using opposite Thermo Fisher and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Thermo Fisher vs. Micron Technology | Thermo Fisher vs. Fresenius Medical Care | Thermo Fisher vs. Roper Technologies, | Thermo Fisher vs. Fair Isaac |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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