Correlation Between Agilent Technologies and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Ally Financial 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 Agilent Technologies and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Ally Financial, you can compare the effects of market volatilities on Agilent Technologies and Ally Financial 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 Agilent Technologies with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Ally Financial.
Diversification Opportunities for Agilent Technologies and Ally Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agilent and Ally is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Agilent Technologies 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 Agilent Technologies are associated (or correlated) with Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Ally Financial go up and down completely randomly.
Pair Corralation between Agilent Technologies and Ally Financial
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 4.59 times less return on investment than Ally Financial. But when comparing it to its historical volatility, Agilent Technologies is 14.41 times less risky than Ally Financial. It trades about 0.32 of its potential returns per unit of risk. Ally Financial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,601 in Ally Financial on November 5, 2024 and sell it today you would earn a total of 298.00 from holding Ally Financial or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Ally Financial
Performance |
| Timeline |
| Agilent Technologies |
| Ally Financial |
Agilent Technologies and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Ally Financial
The main advantage of trading using opposite Agilent Technologies and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Ally Financial 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| Agilent Technologies vs. Melia Hotels | Agilent Technologies vs. AMG Advanced Metallurgical | Agilent Technologies vs. Eastinco Mining Exploration | Agilent Technologies vs. Gaming Realms plc |
| Ally Financial vs. Geely Automobile Holdings | Ally Financial vs. Beazer Homes USA | Ally Financial vs. Qurate Retail Series | Ally Financial vs. MTI Wireless Edge |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |