Correlation Between Tyson Foods and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Agilent Technologies 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 Tyson Foods and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods Cl and Agilent Technologies, you can compare the effects of market volatilities on Tyson Foods and Agilent Technologies 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 Tyson Foods with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Agilent Technologies.
Diversification Opportunities for Tyson Foods and Agilent Technologies
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tyson and Agilent is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods Cl and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Tyson Foods 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 Tyson Foods Cl are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Tyson Foods i.e., Tyson Foods and Agilent Technologies go up and down completely randomly.
Pair Corralation between Tyson Foods and Agilent Technologies
Assuming the 90 days trading horizon Tyson Foods Cl is expected to under-perform the Agilent Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Tyson Foods Cl is 1.06 times less risky than Agilent Technologies. The stock trades about -0.61 of its potential returns per unit of risk. The Agilent Technologies is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 14,348 in Agilent Technologies on October 10, 2024 and sell it today you would lose (652.00) from holding Agilent Technologies or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods Cl vs. Agilent Technologies
Performance |
| Timeline |
| Tyson Foods Cl |
| Agilent Technologies |
Tyson Foods and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Agilent Technologies
The main advantage of trading using opposite Tyson Foods and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Tyson Foods vs. Micron Technology | Tyson Foods vs. Sunny Optical Technology | Tyson Foods vs. Polar Capital Technology | Tyson Foods vs. Odfjell Drilling |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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