Correlation Between Thermo Fisher and Revvity

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

By analyzing existing cross correlation between Thermo Fisher Scientific and Revvity, you can compare the effects of market volatilities on Thermo Fisher and Revvity 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 Thermo Fisher with a short position of Revvity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and Revvity.

Diversification Opportunities for Thermo Fisher and Revvity

0.92

Correlation Coefficient

Thermo Fisher  Revvity

Almost no diversification

The 3 months correlation between Thermo and Revvity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and Revvity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revvity and Thermo Fisher 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 Thermo Fisher Scientific are associated (or correlated) with Revvity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revvity has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and Revvity go up and down completely randomly.

Pair Corralation between Thermo Fisher and Revvity

Considering the 90-day investment horizon Thermo Fisher Scientific is expected to under-perform the Revvity. But the stock apears to be less risky and, when comparing its historical volatility, Thermo Fisher Scientific is 1.18 times less risky than Revvity. The stock trades about -0.17 of its potential returns per unit of risk. The Revvity is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  12,263  in Revvity on January 12, 2025 and sell it today you would lose (2,777) from holding Revvity or give up 22.65% of portfolio value over 90 days.

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

Thermo Fisher Scientific  vs.  Revvity

Thermo Fisher Scientific

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thermo Fisher Scientific 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 primary indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Revvity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Revvity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Thermo Fisher and Revvity

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

The idea behind Thermo Fisher Scientific and Revvity 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.