Correlation Between Equillium and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Equillium 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 Equillium and Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Thermo Fisher Scientific, you can compare the effects of market volatilities on Equillium 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 Equillium with a short position of Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Thermo Fisher.
Diversification Opportunities for Equillium and Thermo Fisher
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equillium and Thermo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Equillium 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 Equillium 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 Equillium 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 Equillium i.e., Equillium and Thermo Fisher go up and down completely randomly.
Pair Corralation between Equillium and Thermo Fisher
Allowing for the 90-day total investment horizon Equillium is expected to under-perform the Thermo Fisher. In addition to that, Equillium is 5.23 times more volatile than Thermo Fisher Scientific. It trades about -0.12 of its total potential returns per unit of risk. Thermo Fisher Scientific is currently generating about 0.01 per unit of volatility. If you would invest 57,165 in Thermo Fisher Scientific on January 29, 2024 and sell it today you would earn a total of 195.00 from holding Thermo Fisher Scientific or generate 0.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Equillium vs. Thermo Fisher Scientific
Performance |
Timeline |
Equillium |
Thermo Fisher Scientific |
Equillium and Thermo Fisher Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Equillium and Thermo Fisher
The main advantage of trading using opposite Equillium and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium 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.Equillium vs. Lyra TherapeuticsInc | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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