Correlation Between Agilent Technologies and Devon Energy
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Devon Energy 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 Devon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Devon Energy, you can compare the effects of market volatilities on Agilent Technologies and Devon Energy 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 Devon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Devon Energy.
Diversification Opportunities for Agilent Technologies and Devon Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Devon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Devon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Devon Energy 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 Devon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Devon Energy has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Devon Energy go up and down completely randomly.
Pair Corralation between Agilent Technologies and Devon Energy
Assuming the 90 days trading horizon Agilent Technologies is expected to under-perform the Devon Energy. In addition to that, Agilent Technologies is 1.92 times more volatile than Devon Energy. It trades about -0.05 of its total potential returns per unit of risk. Devon Energy is currently generating about 0.13 per unit of volatility. If you would invest 22,330 in Devon Energy on August 26, 2024 and sell it today you would earn a total of 647.00 from holding Devon Energy or generate 2.9% 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. Devon Energy
Performance |
| Timeline |
| Agilent Technologies |
| Devon Energy |
Agilent Technologies and Devon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Devon Energy
The main advantage of trading using opposite Agilent Technologies and Devon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Devon Energy 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 Devon Energy will offset losses from the drop in Devon Energy's long position.| Agilent Technologies vs. Fras le SA | Agilent Technologies vs. Western Digital | Agilent Technologies vs. Clave Indices De | Agilent Technologies vs. BTG Pactual Logstica |
| Devon Energy vs. Healthpeak Properties | Devon Energy vs. Brpr Corporate Offices | Devon Energy vs. NXP Semiconductors NV | Devon Energy vs. New Oriental Education |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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