Correlation Between Agilent Technologies and Align Technology
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Align Technology 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 Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Align Technology, you can compare the effects of market volatilities on Agilent Technologies and Align Technology 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 Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Align Technology.
Diversification Opportunities for Agilent Technologies and Align Technology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agilent and Align is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology 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 Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Align Technology go up and down completely randomly.
Pair Corralation between Agilent Technologies and Align Technology
Assuming the 90 days trading horizon Agilent Technologies is expected to under-perform the Align Technology. In addition to that, Agilent Technologies is 1.81 times more volatile than Align Technology. It trades about -0.05 of its total potential returns per unit of risk. Align Technology is currently generating about 0.27 per unit of volatility. If you would invest 30,659 in Align Technology on August 23, 2024 and sell it today you would earn a total of 2,077 from holding Align Technology or generate 6.77% 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. Align Technology
Performance |
| Timeline |
| Agilent Technologies |
| Align Technology |
Agilent Technologies and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Align Technology
The main advantage of trading using opposite Agilent Technologies and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| Agilent Technologies vs. Prudential Financial | Agilent Technologies vs. Ameriprise Financial | Agilent Technologies vs. Mitsubishi UFJ Financial | Agilent Technologies vs. Metalrgica Riosulense SA |
| Align Technology vs. Bread Financial Holdings | Align Technology vs. Charter Communications | Align Technology vs. GP Investments | Align Technology vs. G2D Investments |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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