Correlation Between Bio Rad and FVCBankcorp

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

Diversification Opportunities for Bio Rad and FVCBankcorp

0.72

Correlation Coefficient

Bio Rad  FVCBankcorp

Poor diversification

The 3 months correlation between Bio and FVCBankcorp is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and FVCBankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FVCBankcorp 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 FVCBankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FVCBankcorp has no effect on the direction of Bio Rad i.e., Bio Rad and FVCBankcorp go up and down completely randomly.

Pair Corralation between Bio Rad and FVCBankcorp

Considering the 90-day investment horizon Bio Rad is expected to generate 2.68 times less return on investment than FVCBankcorp. In addition to that, Bio Rad is 1.47 times more volatile than FVCBankcorp. It trades about 0.03 of its total potential returns per unit of risk. FVCBankcorp is currently generating about 0.11 per unit of volatility. If you would invest  1,155  in FVCBankcorp on May 2, 2025 and sell it today you would earn a total of  126.00  from holding FVCBankcorp or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bio Rad Laboratories  vs.  FVCBankcorp

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 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Bio Rad is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

FVCBankcorp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FVCBankcorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, FVCBankcorp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Bio Rad and FVCBankcorp

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

The idea behind Bio Rad Laboratories and FVCBankcorp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .