Correlation Between Thermo Fisher and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Thermo Fisher and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Thermo Fisher and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Dow Jones.
Diversification Opportunities for Thermo Fisher and Dow Jones
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thermo and Dow is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and Dow Jones go up and down completely randomly.
Pair Corralation between Thermo Fisher and Dow Jones
Assuming the 90 days horizon Thermo Fisher is expected to generate 11.73 times less return on investment than Dow Jones. In addition to that, Thermo Fisher is 1.93 times more volatile than Dow Jones Industrial. It trades about 0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Thermo Fisher Scientific vs. Dow Jones Industrial
Performance |
| Timeline |
Thermo Fisher and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Thermo Fisher Scientific
Pair trading matchups for Thermo Fisher
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Thermo Fisher and Dow Jones
The main advantage of trading using opposite Thermo Fisher and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Thermo Fisher vs. MagnaChip Semiconductor Corp | Thermo Fisher vs. TOREX SEMICONDUCTOR LTD | Thermo Fisher vs. X FAB Silicon Foundries | Thermo Fisher vs. Wayside Technology Group |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |