Correlation Between Bio Rad and WisdomTree Europe

Can any of the company-specific risk be diversified away by investing in both Bio Rad and WisdomTree Europe 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 Bio Rad and WisdomTree Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bio Rad Laboratories and WisdomTree Europe SmallCap, you can compare the effects of market volatilities on Bio Rad and WisdomTree Europe 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 Bio Rad with a short position of WisdomTree Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Rad and WisdomTree Europe.

Diversification Opportunities for Bio Rad and WisdomTree Europe

0.32

Correlation Coefficient

Bio Rad  WisdomTree Europe

Weak diversification

The 3 months correlation between Bio and WisdomTree is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and WisdomTree Europe SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Europe and Bio Rad 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 Bio Rad Laboratories are associated (or correlated) with WisdomTree Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Europe has no effect on the direction of Bio Rad i.e., Bio Rad and WisdomTree Europe go up and down completely randomly.

Pair Corralation between Bio Rad and WisdomTree Europe

Considering the 90-day investment horizon Bio Rad is expected to generate 1.01 times less return on investment than WisdomTree Europe. In addition to that, Bio Rad is 3.36 times more volatile than WisdomTree Europe SmallCap. It trades about 0.05 of its total potential returns per unit of risk. WisdomTree Europe SmallCap is currently generating about 0.16 per unit of volatility. If you would invest  6,459  in WisdomTree Europe SmallCap on May 2, 2025 and sell it today you would earn a total of  467.00  from holding WisdomTree Europe SmallCap or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Bio Rad Laboratories  vs.  WisdomTree Europe SmallCap

Bio Rad Laboratories

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Rad Laboratories are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Bio Rad may actually be approaching a critical reversion point that can send shares even higher in August 2025.

WisdomTree Europe

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Europe SmallCap are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, WisdomTree Europe may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Bio Rad and WisdomTree Europe

The main advantage of trading using opposite Bio Rad and WisdomTree Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Rad position performs unexpectedly, WisdomTree Europe 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 WisdomTree Europe will offset losses from the drop in WisdomTree Europe's long position.

The idea behind Bio Rad Laboratories and WisdomTree Europe SmallCap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.