Correlation Between THERMO FISHER and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both THERMO FISHER and Dairy Farm 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 Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THERMO FISHER SCIEN and Dairy Farm International, you can compare the effects of market volatilities on THERMO FISHER and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of THERMO FISHER and Dairy Farm.
Diversification Opportunities for THERMO FISHER and Dairy Farm
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between THERMO and Dairy is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding THERMO FISHER SCIEN and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 SCIEN are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of THERMO FISHER i.e., THERMO FISHER and Dairy Farm go up and down completely randomly.
Pair Corralation between THERMO FISHER and Dairy Farm
Assuming the 90 days trading horizon THERMO FISHER SCIEN is expected to under-perform the Dairy Farm. But the stock apears to be less risky and, when comparing its historical volatility, THERMO FISHER SCIEN is 3.18 times less risky than Dairy Farm. The stock trades about -0.09 of its potential returns per unit of risk. The Dairy Farm International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Dairy Farm International on September 12, 2024 and sell it today you would earn a total of 67.00 from holding Dairy Farm International or generate 44.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
THERMO FISHER SCIEN vs. Dairy Farm International
Performance |
| Timeline |
| THERMO FISHER SCIEN |
| Dairy Farm International |
THERMO FISHER and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THERMO FISHER and Dairy Farm
The main advantage of trading using opposite THERMO FISHER and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THERMO FISHER position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| THERMO FISHER vs. OAKTRSPECLENDNEW | THERMO FISHER vs. CHIBA BANK | THERMO FISHER vs. Webster Financial | THERMO FISHER vs. Tradegate AG Wertpapierhandelsbank |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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