Correlation Between Masimo and Bio Rad

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

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

Diversification Opportunities for Masimo and Bio Rad

0.45

Correlation Coefficient

Masimo  Bio Rad

Very weak diversification

The 3 months correlation between Masimo and Bio is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and Bio Rad Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Rad Laboratories and Masimo 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 Masimo are associated (or correlated) with Bio Rad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Rad Laboratories has no effect on the direction of Masimo i.e., Masimo and Bio Rad go up and down completely randomly.

Pair Corralation between Masimo and Bio Rad

Given the investment horizon of 90 days Masimo is expected to generate 3.61 times less return on investment than Bio Rad. But when comparing it to its historical volatility, Masimo is 1.2 times less risky than Bio Rad. It trades about 0.02 of its potential returns per unit of risk. Bio Rad Laboratories is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  29,660  in Bio Rad Laboratories on August 26, 2025 and sell it today you would earn a total of  2,588  from holding Bio Rad Laboratories or generate 8.73% return on investment over 90 days.

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

Masimo  vs.  Bio Rad Laboratories

Masimo

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Masimo are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Masimo is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Bio Rad Laboratories

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Rad Laboratories are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Bio Rad may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Masimo and Bio Rad

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

The idea behind Masimo and Bio Rad Laboratories 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.