Correlation Between WuXi AppTec and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both WuXi AppTec and Thermo Fisher 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 WuXi AppTec and Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WuXi AppTec Co and Thermo Fisher Scientific, you can compare the effects of market volatilities on WuXi AppTec and Thermo Fisher 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 WuXi AppTec with a short position of Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and Thermo Fisher.
Diversification Opportunities for WuXi AppTec and Thermo Fisher
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WuXi and Thermo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific and WuXi AppTec 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 WuXi AppTec Co are associated (or correlated) with Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of WuXi AppTec i.e., WuXi AppTec and Thermo Fisher go up and down completely randomly.
Pair Corralation between WuXi AppTec and Thermo Fisher
Assuming the 90 days horizon WuXi AppTec Co is expected to generate 4.63 times more return on investment than Thermo Fisher. However, WuXi AppTec is 4.63 times more volatile than Thermo Fisher Scientific. It trades about 0.16 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.07 per unit of risk. If you would invest 416.00 in WuXi AppTec Co on September 12, 2024 and sell it today you would earn a total of 319.00 from holding WuXi AppTec Co or generate 76.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi AppTec Co vs. Thermo Fisher Scientific
Performance |
| Timeline |
| WuXi AppTec |
| Thermo Fisher Scientific |
WuXi AppTec and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi AppTec and Thermo Fisher
The main advantage of trading using opposite WuXi AppTec and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher's long position.| WuXi AppTec vs. Ribbon Communications | WuXi AppTec vs. SPARTAN STORES | WuXi AppTec vs. Vastned Retail NV | WuXi AppTec vs. JAPAN TOBACCO UNSPADR12 |
| Thermo Fisher vs. MCEWEN MINING INC | Thermo Fisher vs. REINET INVESTMENTS SCA | Thermo Fisher vs. Western Copper and | Thermo Fisher vs. GALENA MINING LTD |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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