Correlation Between Verve Therapeutics and Thermo Fisher

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

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

Diversification Opportunities for Verve Therapeutics and Thermo Fisher

0.58

Correlation Coefficient

Verve Therapeutics  Thermo Fisher

Very weak diversification

The 3 months correlation between Verve and Thermo is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Verve Therapeutics and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific and Verve Therapeutics 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 Verve Therapeutics are associated (or correlated) with Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of Verve Therapeutics i.e., Verve Therapeutics and Thermo Fisher go up and down completely randomly.

Pair Corralation between Verve Therapeutics and Thermo Fisher

Given the investment horizon of 90 days Verve Therapeutics is expected to generate 4.78 times more return on investment than Thermo Fisher. However, Verve Therapeutics is 4.78 times more volatile than Thermo Fisher Scientific. It trades about 0.19 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about 0.11 per unit of risk. If you would invest  422.00  in Verve Therapeutics on May 7, 2025 and sell it today you would earn a total of  691.00  from holding Verve Therapeutics or generate 163.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.8%
Values	Daily Returns

Verve Therapeutics  vs.  Thermo Fisher Scientific

Verve Therapeutics

Risk-Adjusted Performance

Good

Over the last 90 days Verve Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady basic indicators, Verve Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Thermo Fisher Scientific

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thermo Fisher Scientific are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Thermo Fisher displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Verve Therapeutics and Thermo Fisher

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

The idea behind Verve Therapeutics and Thermo Fisher Scientific 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.