Correlation Between Agilent Technologies and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Marvell 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 Marvell 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 Marvell Technology, you can compare the effects of market volatilities on Agilent Technologies and Marvell 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 Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Marvell Technology.
Diversification Opportunities for Agilent Technologies and Marvell Technology
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agilent and Marvell is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Marvell Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell 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 Marvell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvell Technology has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Marvell Technology go up and down completely randomly.
Pair Corralation between Agilent Technologies and Marvell Technology
Assuming the 90 days trading horizon Agilent Technologies is expected to under-perform the Marvell Technology. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.19 times less risky than Marvell Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Marvell Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,745 in Marvell Technology on August 23, 2024 and sell it today you would earn a total of 410.00 from holding Marvell Technology or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Marvell Technology
Performance |
| Timeline |
| Agilent Technologies |
| Marvell Technology |
Agilent Technologies and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Marvell Technology
The main advantage of trading using opposite Agilent Technologies and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Marvell 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 Marvell Technology will offset losses from the drop in Marvell 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 |
| Marvell Technology vs. Magazine Luiza SA | Marvell Technology vs. Natura Co Holding | Marvell Technology vs. Mliuz SA | Marvell Technology vs. Pet Center Comrcio |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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