Correlation Between Agilent Technologies and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Abbott Laboratories 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 Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Abbott Laboratories, you can compare the effects of market volatilities on Agilent Technologies and Abbott Laboratories 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 Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Abbott Laboratories.
Diversification Opportunities for Agilent Technologies and Abbott Laboratories
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Abbott is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories 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 Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Abbott Laboratories go up and down completely randomly.
Pair Corralation between Agilent Technologies and Abbott Laboratories
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 1.59 times more return on investment than Abbott Laboratories. However, Agilent Technologies is 1.59 times more volatile than Abbott Laboratories. It trades about 0.12 of its potential returns per unit of risk. Abbott Laboratories is currently generating about 0.18 per unit of risk. If you would invest 13,123 in Agilent Technologies on August 30, 2024 and sell it today you would earn a total of 691.00 from holding Agilent Technologies or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Abbott Laboratories
Performance |
| Timeline |
| Agilent Technologies |
| Abbott Laboratories |
Agilent Technologies and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Abbott Laboratories
The main advantage of trading using opposite Agilent Technologies and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| Agilent Technologies vs. Danaher | Agilent Technologies vs. Illumina | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Waters |
| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |