Correlation Between Agilent Technologies and ICON PLC
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and ICON PLC 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 ICON PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and ICON PLC, you can compare the effects of market volatilities on Agilent Technologies and ICON PLC 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 ICON PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and ICON PLC.
Diversification Opportunities for Agilent Technologies and ICON PLC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilent and ICON is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and ICON PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON PLC 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 ICON PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON PLC has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and ICON PLC go up and down completely randomly.
Pair Corralation between Agilent Technologies and ICON PLC
Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the ICON PLC. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.27 times less risky than ICON PLC. The stock trades about -0.01 of its potential returns per unit of risk. The ICON PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 19,689 in ICON PLC on August 28, 2024 and sell it today you would earn a total of 1,987 from holding ICON PLC or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. ICON PLC
Performance |
| Timeline |
| Agilent Technologies |
| ICON PLC |
Agilent Technologies and ICON PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and ICON PLC
The main advantage of trading using opposite Agilent Technologies and ICON PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, ICON PLC 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 ICON PLC will offset losses from the drop in ICON PLC's long position.| Agilent Technologies vs. Fonar | Agilent Technologies vs. Burning Rock Biotech | Agilent Technologies vs. Sera Prognostics | Agilent Technologies vs. Exagen Inc |
| ICON PLC vs. Mettler Toledo International | ICON PLC vs. Charles River Laboratories | ICON PLC vs. Laboratory of | ICON PLC vs. IQVIA Holdings |
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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