Correlation Between Bio Rad and Vanguard Consumer

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

Diversification Opportunities for Bio Rad and Vanguard Consumer

-0.18

Correlation Coefficient

Bio Rad  Vanguard Consumer

Good diversification

The 3 months correlation between Bio and Vanguard is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and Vanguard Sumer Staples in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Sumer Staples 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 Vanguard Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Sumer Staples has no effect on the direction of Bio Rad i.e., Bio Rad and Vanguard Consumer go up and down completely randomly.

Pair Corralation between Bio Rad and Vanguard Consumer

Considering the 90-day investment horizon Bio Rad Laboratories is expected to generate 4.76 times more return on investment than Vanguard Consumer. However, Bio Rad is 4.76 times more volatile than Vanguard Sumer Staples. It trades about 0.16 of its potential returns per unit of risk. Vanguard Sumer Staples is currently generating about -0.01 per unit of risk. If you would invest  25,323  in Bio Rad Laboratories on July 27, 2025 and sell it today you would earn a total of  8,652  from holding Bio Rad Laboratories or generate 34.17% return on investment over 90 days.

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

Bio Rad Laboratories  vs.  Vanguard Sumer Staples

Bio Rad Laboratories

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Rad Laboratories are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Bio Rad displayed solid returns over the last few months and may actually be approaching a breakup point.

Vanguard Sumer Staples

Risk-Adjusted Performance

Weakest

Over the last 90 days Vanguard Sumer Staples has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vanguard Consumer is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bio Rad and Vanguard Consumer

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

The idea behind Bio Rad Laboratories and Vanguard Sumer Staples 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 CEOs Directory module to screen CEOs from public companies around the world.