Correlation Between Agilent Technologies and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and HSBC Holdings 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 HSBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and HSBC Holdings plc, you can compare the effects of market volatilities on Agilent Technologies and HSBC Holdings 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 HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and HSBC Holdings.
Diversification Opportunities for Agilent Technologies and HSBC Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agilent and HSBC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and HSBC Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Holdings plc 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 HSBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Holdings plc has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and HSBC Holdings go up and down completely randomly.
Pair Corralation between Agilent Technologies and HSBC Holdings
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 26.54 times less return on investment than HSBC Holdings. But when comparing it to its historical volatility, Agilent Technologies is 13.5 times less risky than HSBC Holdings. It trades about 0.11 of its potential returns per unit of risk. HSBC Holdings plc is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,673 in HSBC Holdings plc on September 3, 2024 and sell it today you would earn a total of 382.00 from holding HSBC Holdings plc or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. HSBC Holdings plc
Performance |
| Timeline |
| Agilent Technologies |
| HSBC Holdings plc |
Agilent Technologies and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and HSBC Holdings
The main advantage of trading using opposite Agilent Technologies and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, HSBC Holdings 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 HSBC Holdings will offset losses from the drop in HSBC Holdings' long position.| Agilent Technologies vs. DexCom Inc | Agilent Technologies vs. Diagnsticos da Amrica | Agilent Technologies vs. Fundo Investimento Imobiliario | Agilent Technologies vs. Fras le SA |
| HSBC Holdings vs. Uber Technologies | HSBC Holdings vs. Agilent Technologies | HSBC Holdings vs. Dell Technologies | HSBC Holdings vs. Palantir Technologies |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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