Correlation Between Agilent Technologies and NEXG11
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and NEXG11 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 NEXG11 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and NEXG11, you can compare the effects of market volatilities on Agilent Technologies and NEXG11 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 NEXG11. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and NEXG11.
Diversification Opportunities for Agilent Technologies and NEXG11
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agilent and NEXG11 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and NEXG11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXG11 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 NEXG11. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXG11 has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and NEXG11 go up and down completely randomly.
Pair Corralation between Agilent Technologies and NEXG11
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 1.88 times less return on investment than NEXG11. In addition to that, Agilent Technologies is 6.78 times more volatile than NEXG11. It trades about 0.03 of its total potential returns per unit of risk. NEXG11 is currently generating about 0.33 per unit of volatility. If you would invest 9,086 in NEXG11 on September 19, 2024 and sell it today you would earn a total of 3,514 from holding NEXG11 or generate 38.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Agilent Technologies vs. NEXG11
Performance |
| Timeline |
| Agilent Technologies |
| NEXG11 |
Agilent Technologies and NEXG11 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and NEXG11
The main advantage of trading using opposite Agilent Technologies and NEXG11 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, NEXG11 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 NEXG11 will offset losses from the drop in NEXG11's long position.| Agilent Technologies vs. DexCom Inc | Agilent Technologies vs. Fundo Investimento Imobiliario | Agilent Technologies vs. LESTE FDO INV | Agilent Technologies vs. Fras le SA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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