Correlation Between Tesla and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Thermo Fisher Scientific, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Thermo Fisher.
Diversification Opportunities for Tesla and Thermo Fisher
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tesla and Thermo is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc 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 Tesla 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 Tesla Inc 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 Tesla i.e., Tesla and Thermo Fisher go up and down completely randomly.
Pair Corralation between Tesla and Thermo Fisher
Assuming the 90 days trading horizon Tesla Inc is expected to generate 3.67 times more return on investment than Thermo Fisher. However, Tesla is 3.67 times more volatile than Thermo Fisher Scientific. It trades about 0.22 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.12 per unit of risk. If you would invest 502,819 in Tesla Inc on September 25, 2024 and sell it today you would earn a total of 420,256 from holding Tesla Inc or generate 83.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 98.39% |
Values | Daily Returns |
Tesla Inc vs. Thermo Fisher Scientific
Performance |
Timeline |
Tesla Inc |
Thermo Fisher Scientific |
Tesla and Thermo Fisher Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tesla and Thermo Fisher
The main advantage of trading using opposite Tesla and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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 Tesla Inc 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.Thermo Fisher vs. McEwen Mining | Thermo Fisher vs. Verizon Communications | Thermo Fisher vs. Taiwan Semiconductor Manufacturing | Thermo Fisher vs. Micron Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |