Correlation Between Agilent Technologies and Gilead Sciences
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Gilead Sciences 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 Gilead Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Gilead Sciences, you can compare the effects of market volatilities on Agilent Technologies and Gilead Sciences 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 Gilead Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Gilead Sciences.
Diversification Opportunities for Agilent Technologies and Gilead Sciences
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Gilead is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Gilead Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilead Sciences 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 Gilead Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilead Sciences has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Gilead Sciences go up and down completely randomly.
Pair Corralation between Agilent Technologies and Gilead Sciences
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.99 times more return on investment than Gilead Sciences. However, Agilent Technologies is 1.01 times less risky than Gilead Sciences. It trades about 0.12 of its potential returns per unit of risk. Gilead Sciences is currently generating about 0.12 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. Gilead Sciences
Performance |
| Timeline |
| Agilent Technologies |
| Gilead Sciences |
Agilent Technologies and Gilead Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Gilead Sciences
The main advantage of trading using opposite Agilent Technologies and Gilead Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Gilead Sciences 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 Gilead Sciences will offset losses from the drop in Gilead Sciences' long position.| Agilent Technologies vs. Danaher | Agilent Technologies vs. Illumina | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Waters |
| Gilead Sciences vs. Ikena Oncology | Gilead Sciences vs. Eliem Therapeutics | Gilead Sciences vs. HCW Biologics | Gilead Sciences vs. Tempest Therapeutics |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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