Correlation Between Agilent Technologies and Caredx
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Caredx 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 Caredx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Caredx Inc, you can compare the effects of market volatilities on Agilent Technologies and Caredx 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 Caredx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Caredx.
Diversification Opportunities for Agilent Technologies and Caredx
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agilent and Caredx is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Caredx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caredx Inc 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 Caredx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caredx Inc has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Caredx go up and down completely randomly.
Pair Corralation between Agilent Technologies and Caredx
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.35 times more return on investment than Caredx. However, Agilent Technologies is 2.88 times less risky than Caredx. It trades about 0.41 of its potential returns per unit of risk. Caredx Inc is currently generating about 0.1 per unit of risk. If you would invest 13,434 in Agilent Technologies on November 1, 2024 and sell it today you would earn a total of 1,704 from holding Agilent Technologies or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Caredx Inc
Performance |
| Timeline |
| Agilent Technologies |
| Caredx Inc |
Agilent Technologies and Caredx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Caredx
The main advantage of trading using opposite Agilent Technologies and Caredx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Caredx 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 Caredx will offset losses from the drop in Caredx's long position.| Agilent Technologies vs. Danaher | Agilent Technologies vs. Illumina | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Waters |
| Caredx vs. Castle Biosciences | Caredx vs. Twist Bioscience Corp | Caredx vs. Biodesix | Caredx vs. Natera Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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