Correlation Between Agilent Technologies and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Virgin Wines 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 Virgin Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Virgin Wines UK, you can compare the effects of market volatilities on Agilent Technologies and Virgin Wines 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 Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Virgin Wines.
Diversification Opportunities for Agilent Technologies and Virgin Wines
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agilent and Virgin is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Virgin Wines UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Wines UK 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 Virgin Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Wines UK has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Virgin Wines go up and down completely randomly.
Pair Corralation between Agilent Technologies and Virgin Wines
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 0.81 times more return on investment than Virgin Wines. However, Agilent Technologies is 1.24 times less risky than Virgin Wines. It trades about 0.4 of its potential returns per unit of risk. Virgin Wines UK is currently generating about -0.17 per unit of risk. If you would invest 13,300 in Agilent Technologies on November 3, 2024 and sell it today you would earn a total of 1,970 from holding Agilent Technologies or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Virgin Wines UK
Performance |
| Timeline |
| Agilent Technologies |
| Virgin Wines UK |
Agilent Technologies and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Virgin Wines
The main advantage of trading using opposite Agilent Technologies and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Virgin Wines 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 Virgin Wines will offset losses from the drop in Virgin Wines' long position.| Agilent Technologies vs. CAP LEASE AVIATION | Agilent Technologies vs. Ebro Foods | Agilent Technologies vs. Broadcom | Agilent Technologies vs. Broadridge Financial Solutions |
| Virgin Wines vs. Auction Technology Group | Virgin Wines vs. Polar Capital Technology | Virgin Wines vs. Vitec Software Group | Virgin Wines vs. Telecom Italia SpA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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