Correlation Between Agilent Technologies and Novavax
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Novavax 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 Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Novavax, you can compare the effects of market volatilities on Agilent Technologies and Novavax 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 Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Novavax.
Diversification Opportunities for Agilent Technologies and Novavax
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilent and Novavax is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax 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 Novavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavax has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Novavax go up and down completely randomly.
Pair Corralation between Agilent Technologies and Novavax
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.47 times more return on investment than Novavax. However, Agilent Technologies is 2.12 times less risky than Novavax. It trades about 0.08 of its potential returns per unit of risk. Novavax is currently generating about -0.14 per unit of risk. If you would invest 13,019 in Agilent Technologies on August 26, 2024 and sell it today you would earn a total of 365.00 from holding Agilent Technologies or generate 2.8% 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. Novavax
Performance |
| Timeline |
| Agilent Technologies |
| Novavax |
Agilent Technologies and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Novavax
The main advantage of trading using opposite Agilent Technologies and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Novavax 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 Novavax will offset losses from the drop in Novavax's long position.| Agilent Technologies vs. Fonar | Agilent Technologies vs. Burning Rock Biotech | Agilent Technologies vs. Sera Prognostics | Agilent Technologies vs. Exagen 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |