Correlation Between Qiagen NV and IDEXX Laboratories

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

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

Diversification Opportunities for Qiagen NV and IDEXX Laboratories

-0.4

Correlation Coefficient

Qiagen NV  IDEXX Laboratories

Very good diversification

The 3 months correlation between Qiagen and IDEXX is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Qiagen NV and IDEXX Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEXX Laboratories and Qiagen NV 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 Qiagen NV are associated (or correlated) with IDEXX Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEXX Laboratories has no effect on the direction of Qiagen NV i.e., Qiagen NV and IDEXX Laboratories go up and down completely randomly.

Pair Corralation between Qiagen NV and IDEXX Laboratories

Given the investment horizon of 90 days Qiagen NV is expected to under-perform the IDEXX Laboratories. But the stock apears to be less risky and, when comparing its historical volatility, Qiagen NV is 1.36 times less risky than IDEXX Laboratories. The stock trades about -0.11 of its potential returns per unit of risk. The IDEXX Laboratories is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  40,903  in IDEXX Laboratories on December 19, 2024 and sell it today you would earn a total of  1,049  from holding IDEXX Laboratories or generate 2.56% return on investment over 90 days.

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

Qiagen NV  vs.  IDEXX Laboratories

Qiagen NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qiagen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

IDEXX Laboratories

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IDEXX Laboratories are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, IDEXX Laboratories is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Qiagen NV and IDEXX Laboratories

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

The idea behind Qiagen NV and IDEXX 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.