Correlation Between Agilent Technologies and T2 Biosystms
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and T2 Biosystms 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 T2 Biosystms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and T2 Biosystms, you can compare the effects of market volatilities on Agilent Technologies and T2 Biosystms 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 T2 Biosystms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and T2 Biosystms.
Diversification Opportunities for Agilent Technologies and T2 Biosystms
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agilent and TTOO is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and T2 Biosystms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Biosystms 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 T2 Biosystms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Biosystms has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and T2 Biosystms go up and down completely randomly.
Pair Corralation between Agilent Technologies and T2 Biosystms
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.13 times more return on investment than T2 Biosystms. However, Agilent Technologies is 7.47 times less risky than T2 Biosystms. It trades about -0.03 of its potential returns per unit of risk. T2 Biosystms is currently generating about -0.07 per unit of risk. If you would invest 14,828 in Agilent Technologies on December 2, 2024 and sell it today you would lose (2,036) from holding Agilent Technologies or give up 13.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Agilent Technologies vs. T2 Biosystms
Performance |
| Timeline |
| Agilent Technologies |
| T2 Biosystms |
Agilent Technologies and T2 Biosystms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and T2 Biosystms
The main advantage of trading using opposite Agilent Technologies and T2 Biosystms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, T2 Biosystms 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 T2 Biosystms will offset losses from the drop in T2 Biosystms' long position.| Agilent Technologies vs. Danaher | ||
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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