Correlation Between Thermo Fisher and G2D Investments

Can any of the company-specific risk be diversified away by investing in both Thermo Fisher and G2D Investments 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 G2D Investments 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 G2D Investments, you can compare the effects of market volatilities on Thermo Fisher and G2D Investments 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 G2D Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermo Fisher and G2D Investments.

Diversification Opportunities for Thermo Fisher and G2D Investments

0.56

Correlation Coefficient

Thermo Fisher  G2D Investments

Very weak diversification

The 3 months correlation between Thermo and G2D is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and G2D Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2D Investments 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 G2D Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2D Investments has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and G2D Investments go up and down completely randomly.

Pair Corralation between Thermo Fisher and G2D Investments

Assuming the 90 days trading horizon Thermo Fisher Scientific is expected to under-perform the G2D Investments. In addition to that, Thermo Fisher is 1.08 times more volatile than G2D Investments. It trades about -0.08 of its total potential returns per unit of risk. G2D Investments is currently generating about -0.07 per unit of volatility. If you would invest  180.00  in G2D Investments on December 30, 2024 and sell it today you would lose (16.00) from holding G2D Investments or give up 8.89% of portfolio value over 90 days.

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

Thermo Fisher Scientific  vs.  G2D Investments

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. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

G2D Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days G2D Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Thermo Fisher and G2D Investments

The main advantage of trading using opposite Thermo Fisher and G2D Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermo Fisher position performs unexpectedly, G2D Investments 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 G2D Investments will offset losses from the drop in G2D Investments' long position.

The idea behind Thermo Fisher Scientific and G2D Investments 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 CEOs Directory module to screen CEOs from public companies around the world.