Correlation Between Charles River and Bio Techne

Can any of the company-specific risk be diversified away by investing in both Charles River and Bio Techne 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 Charles River and Bio Techne into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Charles River Laboratories and Bio Techne Corp, you can compare the effects of market volatilities on Charles River and Bio Techne 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 Charles River with a short position of Bio Techne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles River and Bio Techne.

Diversification Opportunities for Charles River and Bio Techne

0.72

Correlation Coefficient

Charles River  Bio Techne

Poor diversification

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

Pair Corralation between Charles River and Bio Techne

Considering the 90-day investment horizon Charles River Laboratories is expected to under-perform the Bio Techne. But the stock apears to be less risky and, when comparing its historical volatility, Charles River Laboratories is 1.05 times less risky than Bio Techne. The stock trades about -0.02 of its potential returns per unit of risk. The Bio Techne Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,310  in Bio Techne Corp on July 2, 2025 and sell it today you would lose (87.00) from holding Bio Techne Corp or give up 1.64% of portfolio value over 90 days.

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

Charles River Laboratories  vs.  Bio Techne Corp

Charles River Labora

Risk-Adjusted Performance

Weakest

Over the last 90 days Charles River Laboratories has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Charles River is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bio Techne Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Bio Techne Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Bio Techne is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Charles River and Bio Techne

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

The idea behind Charles River Laboratories and Bio Techne Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.