Correlation Between Agilent Technologies and Longduoduo Company
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Longduoduo Company 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 Longduoduo Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Longduoduo Company Limited, you can compare the effects of market volatilities on Agilent Technologies and Longduoduo Company 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 Longduoduo Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Longduoduo Company.
Diversification Opportunities for Agilent Technologies and Longduoduo Company
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Longduoduo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Longduoduo Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longduoduo Limited 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 Longduoduo Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longduoduo Limited has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Longduoduo Company go up and down completely randomly.
Pair Corralation between Agilent Technologies and Longduoduo Company
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 26.71 times less return on investment than Longduoduo Company. But when comparing it to its historical volatility, Agilent Technologies is 6.95 times less risky than Longduoduo Company. It trades about 0.01 of its potential returns per unit of risk. Longduoduo Company Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Longduoduo Company Limited on November 1, 2024 and sell it today you would lose (10.00) from holding Longduoduo Company Limited or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Longduoduo Company Limited
Performance |
| Timeline |
| Agilent Technologies |
| Longduoduo Limited |
Agilent Technologies and Longduoduo Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Longduoduo Company
The main advantage of trading using opposite Agilent Technologies and Longduoduo Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Longduoduo Company 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 Longduoduo Company will offset losses from the drop in Longduoduo Company's long position.| Agilent Technologies vs. Danaher | Agilent Technologies vs. Illumina | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Waters |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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