Correlation Between Superior Plus and Thermo Fisher

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

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

Diversification Opportunities for Superior Plus and Thermo Fisher

0.77

Correlation Coefficient

Superior Plus  Thermo Fisher

Poor diversification

The 3 months correlation between Superior and Thermo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Thermo Fisher go up and down completely randomly.

Pair Corralation between Superior Plus and Thermo Fisher

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Thermo Fisher. In addition to that, Superior Plus is 1.27 times more volatile than Thermo Fisher Scientific. It trades about -0.28 of its total potential returns per unit of risk. Thermo Fisher Scientific is currently generating about 0.05 per unit of volatility. If you would invest  50,541  in Thermo Fisher Scientific on October 4, 2024 and sell it today you would earn a total of  529.00  from holding Thermo Fisher Scientific or generate 1.05% return on investment over 90 days.

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

Superior Plus Corp  vs.  Thermo Fisher Scientific

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Thermo Fisher Scientific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermo Fisher Scientific has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Superior Plus and Thermo Fisher

The main advantage of trading using opposite Superior Plus and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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 Superior Plus Corp 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.