Correlation Between Agilent Technologies and Rigel Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Rigel Pharmaceuticals 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 Rigel Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Rigel Pharmaceuticals, you can compare the effects of market volatilities on Agilent Technologies and Rigel Pharmaceuticals 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 Rigel Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Rigel Pharmaceuticals.
Diversification Opportunities for Agilent Technologies and Rigel Pharmaceuticals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Rigel is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Rigel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigel Pharmaceuticals 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 Rigel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigel Pharmaceuticals has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Rigel Pharmaceuticals go up and down completely randomly.
Pair Corralation between Agilent Technologies and Rigel Pharmaceuticals
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 28.33 times less return on investment than Rigel Pharmaceuticals. But when comparing it to its historical volatility, Agilent Technologies is 5.38 times less risky than Rigel Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. Rigel Pharmaceuticals is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,452 in Rigel Pharmaceuticals on August 29, 2024 and sell it today you would earn a total of 1,218 from holding Rigel Pharmaceuticals or generate 83.88% 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. Rigel Pharmaceuticals
Performance |
| Timeline |
| Agilent Technologies |
| Rigel Pharmaceuticals |
Agilent Technologies and Rigel Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Rigel Pharmaceuticals
The main advantage of trading using opposite Agilent Technologies and Rigel Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Rigel Pharmaceuticals 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 Rigel Pharmaceuticals will offset losses from the drop in Rigel Pharmaceuticals' long position.| Agilent Technologies vs. Fonar | Agilent Technologies vs. Burning Rock Biotech | Agilent Technologies vs. Sera Prognostics | Agilent Technologies vs. Exagen Inc |
| Rigel Pharmaceuticals vs. Fortress Biotech | Rigel Pharmaceuticals vs. Reviva Pharmaceuticals Holdings | Rigel Pharmaceuticals vs. Pieris Pharmaceuticals | Rigel Pharmaceuticals vs. Cidara Therapeutics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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