Correlation Between Bio Rad and TCL Electronics

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

Diversification Opportunities for Bio Rad and TCL Electronics

0.02

Correlation Coefficient

Bio Rad  TCL Electronics

Significant diversification

The 3 months correlation between Bio and TCL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and TCL Electronics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCL Electronics Holdings 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 TCL Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCL Electronics Holdings has no effect on the direction of Bio Rad i.e., Bio Rad and TCL Electronics go up and down completely randomly.

Pair Corralation between Bio Rad and TCL Electronics

Considering the 90-day investment horizon Bio Rad is expected to generate 42.48 times less return on investment than TCL Electronics. But when comparing it to its historical volatility, Bio Rad Laboratories is 8.1 times less risky than TCL Electronics. It trades about 0.02 of its potential returns per unit of risk. TCL Electronics Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  121.00  in TCL Electronics Holdings on May 3, 2025 and sell it today you would lose (10.00) from holding TCL Electronics Holdings or give up 8.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Bio Rad Laboratories  vs.  TCL Electronics Holdings

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 1 (%) 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.

TCL Electronics Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TCL Electronics Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, TCL Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio Rad and TCL Electronics

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

The idea behind Bio Rad Laboratories and TCL Electronics Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.