Correlation Between Agilent Technologies and Autohome
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Autohome 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 Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Autohome, you can compare the effects of market volatilities on Agilent Technologies and Autohome 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 Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Autohome.
Diversification Opportunities for Agilent Technologies and Autohome
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agilent and Autohome is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome 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 Autohome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Autohome go up and down completely randomly.
Pair Corralation between Agilent Technologies and Autohome
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 1.51 times more return on investment than Autohome. However, Agilent Technologies is 1.51 times more volatile than Autohome. It trades about -0.05 of its potential returns per unit of risk. Autohome is currently generating about -0.18 per unit of risk. If you would invest 41,360 in Agilent Technologies on August 27, 2024 and sell it today you would lose (1,073) from holding Agilent Technologies or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Autohome
Performance |
| Timeline |
| Agilent Technologies |
| Autohome |
Agilent Technologies and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Autohome
The main advantage of trading using opposite Agilent Technologies and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Autohome 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 Autohome will offset losses from the drop in Autohome's long position.| Agilent Technologies vs. Raytheon Technologies | Agilent Technologies vs. Dell Technologies | Agilent Technologies vs. METISA Metalrgica Timboense | Agilent Technologies vs. Monster Beverage |
| Autohome vs. The Bank of | Autohome vs. Paycom Software | Autohome vs. MAHLE Metal Leve | Autohome vs. Waste Management |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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