Correlation Between Agilent Technologies and PTC Therapeutics
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and PTC Therapeutics 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 PTC Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and PTC Therapeutics, you can compare the effects of market volatilities on Agilent Technologies and PTC Therapeutics 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 PTC Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and PTC Therapeutics.
Diversification Opportunities for Agilent Technologies and PTC Therapeutics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and PTC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and PTC Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Therapeutics 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 PTC Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Therapeutics has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and PTC Therapeutics go up and down completely randomly.
Pair Corralation between Agilent Technologies and PTC Therapeutics
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 2.15 times less return on investment than PTC Therapeutics. But when comparing it to its historical volatility, Agilent Technologies is 1.63 times less risky than PTC Therapeutics. It trades about 0.12 of its potential returns per unit of risk. PTC Therapeutics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,066 in PTC Therapeutics on August 31, 2024 and sell it today you would earn a total of 445.00 from holding PTC Therapeutics or generate 10.94% 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. PTC Therapeutics
Performance |
| Timeline |
| Agilent Technologies |
| PTC Therapeutics |
Agilent Technologies and PTC Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and PTC Therapeutics
The main advantage of trading using opposite Agilent Technologies and PTC Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, PTC Therapeutics 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 PTC Therapeutics will offset losses from the drop in PTC Therapeutics' long position.| Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. IQVIA Holdings | Agilent Technologies vs. Charles River Laboratories | Agilent Technologies vs. Revvity |
| PTC Therapeutics vs. Krystal Biotech | PTC Therapeutics vs. Sarepta Therapeutics | PTC Therapeutics vs. Iovance Biotherapeutics | PTC Therapeutics vs. Madrigal Pharmaceuticals |
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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