Correlation Between Exicure and Thermo Fisher

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

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

Diversification Opportunities for Exicure and Thermo Fisher

-0.31

Correlation Coefficient

Exicure  Thermo Fisher

Very good diversification

The 3 months correlation between Exicure and Thermo is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Exicure 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 Exicure 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 Exicure 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 Exicure i.e., Exicure and Thermo Fisher go up and down completely randomly.

Pair Corralation between Exicure and Thermo Fisher

Given the investment horizon of 90 days Exicure is expected to generate 7.52 times more return on investment than Thermo Fisher. However, Exicure is 7.52 times more volatile than Thermo Fisher Scientific. It trades about 0.04 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.01 per unit of risk. If you would invest  1,615  in Exicure on December 28, 2024 and sell it today you would lose (215.00) from holding Exicure or give up 13.31% of portfolio value over 90 days.

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

Exicure  vs.  Thermo Fisher Scientific

Exicure

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exicure are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Exicure reported solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of very healthy primary indicators, Thermo Fisher is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Exicure and Thermo Fisher

The main advantage of trading using opposite Exicure and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exicure 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 Exicure 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.