Correlation Between Agilent Technologies and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Sotera Health 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 Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Sotera Health Co, you can compare the effects of market volatilities on Agilent Technologies and Sotera Health 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 Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Sotera Health.
Diversification Opportunities for Agilent Technologies and Sotera Health
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Sotera is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health 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 Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Sotera Health go up and down completely randomly.
Pair Corralation between Agilent Technologies and Sotera Health
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.95 times more return on investment than Sotera Health. However, Agilent Technologies is 1.05 times less risky than Sotera Health. It trades about 0.45 of its potential returns per unit of risk. Sotera Health Co is currently generating about 0.09 per unit of risk. If you would invest 13,343 in Agilent Technologies on November 2, 2024 and sell it today you would earn a total of 1,795 from holding Agilent Technologies or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Sotera Health Co
Performance |
| Timeline |
| Agilent Technologies |
| Sotera Health |
Agilent Technologies and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Sotera Health
The main advantage of trading using opposite Agilent Technologies and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Agilent Technologies vs. Danaher | Agilent Technologies vs. Illumina | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Waters |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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