Correlation Between Agilent Technologies and Optima Health
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Optima Health 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 Optima Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Optima Health plc, you can compare the effects of market volatilities on Agilent Technologies and Optima Health 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 Optima Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Optima Health.
Diversification Opportunities for Agilent Technologies and Optima Health
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Optima is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Optima Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima Health plc 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 Optima Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima Health plc has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Optima Health go up and down completely randomly.
Pair Corralation between Agilent Technologies and Optima Health
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 1.35 times more return on investment than Optima Health. However, Agilent Technologies is 1.35 times more volatile than Optima Health plc. It trades about 0.07 of its potential returns per unit of risk. Optima Health plc is currently generating about -0.01 per unit of risk. If you would invest 13,341 in Agilent Technologies on November 3, 2024 and sell it today you would earn a total of 1,929 from holding Agilent Technologies or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.53% |
| Values | Daily Returns |
Agilent Technologies vs. Optima Health plc
Performance |
| Timeline |
| Agilent Technologies |
| Optima Health plc |
Agilent Technologies and Optima Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Optima Health
The main advantage of trading using opposite Agilent Technologies and Optima Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Optima Health 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 Optima Health will offset losses from the drop in Optima Health's long position.| Agilent Technologies vs. Alliance Data Systems | Agilent Technologies vs. Empire Metals Limited | Agilent Technologies vs. URU Metals | Agilent Technologies vs. European Metals Holdings |
| Optima Health vs. AMG Advanced Metallurgical | Optima Health vs. Wheaton Precious Metals | Optima Health vs. Liontrust Asset Management | Optima Health vs. Darden Restaurants |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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