Correlation Between Agilent Technologies and Avita Medical
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Avita Medical 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 Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Avita Medical, you can compare the effects of market volatilities on Agilent Technologies and Avita Medical 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 Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Avita Medical.
Diversification Opportunities for Agilent Technologies and Avita Medical
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Avita is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical 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 Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Avita Medical go up and down completely randomly.
Pair Corralation between Agilent Technologies and Avita Medical
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 4.27 times less return on investment than Avita Medical. But when comparing it to its historical volatility, Agilent Technologies is 1.7 times less risky than Avita Medical. It trades about 0.12 of its potential returns per unit of risk. Avita Medical is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,039 in Avita Medical on August 31, 2024 and sell it today you would earn a total of 243.00 from holding Avita Medical or generate 23.39% 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. Avita Medical
Performance |
| Timeline |
| Agilent Technologies |
| Avita Medical |
Agilent Technologies and Avita Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Avita Medical
The main advantage of trading using opposite Agilent Technologies and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Avita Medical 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 Avita Medical will offset losses from the drop in Avita Medical's long position.| Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. IQVIA Holdings | Agilent Technologies vs. Charles River Laboratories | Agilent Technologies vs. Revvity |
| Avita Medical vs. Abbott Laboratories | Avita Medical vs. Medtronic PLC | Avita Medical vs. Edwards Lifesciences Corp | Avita Medical vs. ZimVie 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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