Correlation Between Bio Techne and Charles River

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

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

Diversification Opportunities for Bio Techne and Charles River

0.83

Correlation Coefficient

Bio Techne  Charles River

Very poor diversification

The 3 months correlation between Bio and Charles is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bio Techne Corp and Charles River Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles River Labora and Bio Techne 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 Techne Corp are associated (or correlated) with Charles River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charles River Labora has no effect on the direction of Bio Techne i.e., Bio Techne and Charles River go up and down completely randomly.

Pair Corralation between Bio Techne and Charles River

Given the investment horizon of 90 days Bio Techne Corp is expected to under-perform the Charles River. In addition to that, Bio Techne is 1.06 times more volatile than Charles River Laboratories. It trades about -0.03 of its total potential returns per unit of risk. Charles River Laboratories is currently generating about 0.04 per unit of volatility. If you would invest  14,308  in Charles River Laboratories on May 10, 2025 and sell it today you would earn a total of  725.00  from holding Charles River Laboratories or generate 5.07% return on investment over 90 days.

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

Bio Techne Corp  vs.  Charles River Laboratories

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.

Charles River Labora

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Charles River Laboratories are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Charles River may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bio Techne and Charles River

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

The idea behind Bio Techne Corp and Charles River Laboratories 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.