Correlation Between Bio Rad and Waters

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

Diversification Opportunities for Bio Rad and Waters

-0.42

Correlation Coefficient

Bio Rad  Waters

Very good diversification

The 3 months correlation between Bio and Waters is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and Waters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waters 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 Waters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waters has no effect on the direction of Bio Rad i.e., Bio Rad and Waters go up and down completely randomly.

Pair Corralation between Bio Rad and Waters

Considering the 90-day investment horizon Bio Rad Laboratories is expected to generate 1.25 times more return on investment than Waters. However, Bio Rad is 1.25 times more volatile than Waters. It trades about 0.1 of its potential returns per unit of risk. Waters is currently generating about -0.1 per unit of risk. If you would invest  24,019  in Bio Rad Laboratories on May 4, 2025 and sell it today you would earn a total of  4,441  from holding Bio Rad Laboratories or generate 18.49% 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.  Waters

Bio Rad Laboratories

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Rad Laboratories are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Bio Rad displayed solid returns over the last few months and may actually be approaching a breakup point.

Waters

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bio Rad and Waters

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

The idea behind Bio Rad Laboratories and Waters 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.