Correlation Between IDEXX Laboratories and IQVIA Holdings

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

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

Diversification Opportunities for IDEXX Laboratories and IQVIA Holdings

0.16

Correlation Coefficient

IDEXX Laboratories  IQVIA Holdings

Average diversification

The 3 months correlation between IDEXX and IQVIA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding IDEXX Laboratories and IQVIA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQVIA Holdings and IDEXX Laboratories 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 IDEXX Laboratories are associated (or correlated) with IQVIA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQVIA Holdings has no effect on the direction of IDEXX Laboratories i.e., IDEXX Laboratories and IQVIA Holdings go up and down completely randomly.

Pair Corralation between IDEXX Laboratories and IQVIA Holdings

Assuming the 90 days horizon IDEXX Laboratories is expected to generate 0.92 times more return on investment than IQVIA Holdings. However, IDEXX Laboratories is 1.08 times less risky than IQVIA Holdings. It trades about 0.18 of its potential returns per unit of risk. IQVIA Holdings is currently generating about 0.08 per unit of risk. If you would invest  35,500  in IDEXX Laboratories on April 22, 2025 and sell it today you would earn a total of  9,060  from holding IDEXX Laboratories or generate 25.52% return on investment over 90 days.

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

IDEXX Laboratories  vs.  IQVIA Holdings

IDEXX Laboratories

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IDEXX Laboratories are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, IDEXX Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

IQVIA Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IQVIA Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, IQVIA Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with IDEXX Laboratories and IQVIA Holdings

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

The idea behind IDEXX Laboratories and IQVIA Holdings 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.