Correlation Between Thermo Fisher and TYSON FOODS

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

Diversification Opportunities for Thermo Fisher and TYSON FOODS

-0.57

Correlation Coefficient

Thermo Fisher  TYSON FOODS

Excellent diversification

The 3 months correlation between Thermo and TYSON is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Thermo Fisher Scientific and TYSON FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TYSON FOODS A 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 TYSON FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TYSON FOODS A has no effect on the direction of Thermo Fisher i.e., Thermo Fisher and TYSON FOODS go up and down completely randomly.

Pair Corralation between Thermo Fisher and TYSON FOODS

Assuming the 90 days horizon Thermo Fisher Scientific is expected to under-perform the TYSON FOODS. In addition to that, Thermo Fisher is 1.15 times more volatile than TYSON FOODS A . It trades about -0.04 of its total potential returns per unit of risk. TYSON FOODS A is currently generating about 0.03 per unit of volatility. If you would invest  5,448  in TYSON FOODS A on December 22, 2024 and sell it today you would earn a total of  100.00  from holding TYSON FOODS A or generate 1.84% return on investment over 90 days.

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

Thermo Fisher Scientific  vs.  TYSON FOODS A

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 nearly stable basic indicators, Thermo Fisher is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

TYSON FOODS A

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TYSON FOODS A are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, TYSON FOODS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Thermo Fisher and TYSON FOODS

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

The idea behind Thermo Fisher Scientific and TYSON FOODS A 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.