Correlation Between Bio Rad and First Capital

Can any of the company-specific risk be diversified away by investing in both Bio Rad and First Capital 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 First Capital 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 First Capital, you can compare the effects of market volatilities on Bio Rad and First Capital 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 First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Rad and First Capital.

Diversification Opportunities for Bio Rad and First Capital

-0.49

Correlation Coefficient

Bio Rad  First Capital

Very good diversification

The 3 months correlation between Bio and First is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Bio Rad i.e., Bio Rad and First Capital go up and down completely randomly.

Pair Corralation between Bio Rad and First Capital

Considering the 90-day investment horizon Bio Rad Laboratories is expected to generate 0.84 times more return on investment than First Capital. However, Bio Rad Laboratories is 1.19 times less risky than First Capital. It trades about 0.03 of its potential returns per unit of risk. First Capital is currently generating about -0.31 per unit of risk. If you would invest  24,799  in Bio Rad Laboratories on May 2, 2025 and sell it today you would earn a total of  209.00  from holding Bio Rad Laboratories or generate 0.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bio Rad Laboratories  vs.  First Capital

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.

First Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bio Rad and First Capital

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

The idea behind Bio Rad Laboratories and First Capital 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.