Correlation Between Agilent Technologies and Danaher
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Danaher 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 Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Danaher, you can compare the effects of market volatilities on Agilent Technologies and Danaher 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 Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Danaher.
Diversification Opportunities for Agilent Technologies and Danaher
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agilent and Danaher is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher 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 Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Danaher go up and down completely randomly.
Pair Corralation between Agilent Technologies and Danaher
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 0.73 times more return on investment than Danaher. However, Agilent Technologies is 1.38 times less risky than Danaher. It trades about 0.1 of its potential returns per unit of risk. Danaher is currently generating about 0.03 per unit of risk. If you would invest 34,527 in Agilent Technologies on September 2, 2024 and sell it today you would earn a total of 5,760 from holding Agilent Technologies or generate 16.68% 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. Danaher
Performance |
| Timeline |
| Agilent Technologies |
| Danaher |
Agilent Technologies and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Danaher
The main advantage of trading using opposite Agilent Technologies and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| Agilent Technologies vs. Fras le SA | Agilent Technologies vs. Western Digital | Agilent Technologies vs. Energisa SA | Agilent Technologies vs. Clave Indices De |
| Danaher vs. Tres Tentos Agroindustrial | Danaher vs. Metalrgica Riosulense SA | Danaher vs. Hospital Mater Dei | Danaher vs. Marfrig Global Foods |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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