Correlation Between Technicolor and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Technicolor 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 Technicolor and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technicolor and Agilent Technologies, you can compare the effects of market volatilities on Technicolor 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 Technicolor with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technicolor and Agilent Technologies.
Diversification Opportunities for Technicolor and Agilent Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Technicolor and Agilent is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Technicolor and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Technicolor 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 Technicolor 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 Technicolor i.e., Technicolor and Agilent Technologies go up and down completely randomly.
Pair Corralation between Technicolor and Agilent Technologies
Assuming the 90 days trading horizon Technicolor is expected to generate 2.92 times more return on investment than Agilent Technologies. However, Technicolor is 2.92 times more volatile than Agilent Technologies. It trades about 0.14 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.2 per unit of risk. If you would invest 12.00 in Technicolor on October 10, 2024 and sell it today you would earn a total of 1.00 from holding Technicolor or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Technicolor vs. Agilent Technologies
Performance |
| Timeline |
| Technicolor |
| Agilent Technologies |
Technicolor and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technicolor and Agilent Technologies
The main advantage of trading using opposite Technicolor and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technicolor 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.| Technicolor vs. Creo Medical Group | Technicolor vs. Panther Metals PLC | Technicolor vs. Rheinmetall AG | Technicolor vs. Wheaton Precious Metals |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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