Correlation Between Agilent Technologies and Prudential Plc
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Prudential Plc 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 Prudential Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Prudential plc, you can compare the effects of market volatilities on Agilent Technologies and Prudential Plc 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 Prudential Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Prudential Plc.
Diversification Opportunities for Agilent Technologies and Prudential Plc
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agilent and Prudential is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Prudential plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential 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 Prudential Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential plc has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Prudential Plc go up and down completely randomly.
Pair Corralation between Agilent Technologies and Prudential Plc
Assuming the 90 days trading horizon Agilent Technologies is expected to generate 1.08 times less return on investment than Prudential Plc. But when comparing it to its historical volatility, Agilent Technologies is 1.54 times less risky than Prudential Plc. It trades about 0.01 of its potential returns per unit of risk. Prudential plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,516 in Prudential plc on September 13, 2024 and sell it today you would lose (122.00) from holding Prudential plc or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.7% |
| Values | Daily Returns |
Agilent Technologies vs. Prudential plc
Performance |
| Timeline |
| Agilent Technologies |
| Prudential plc |
Agilent Technologies and Prudential Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Prudential Plc
The main advantage of trading using opposite Agilent Technologies and Prudential Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Prudential Plc 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 Prudential Plc will offset losses from the drop in Prudential Plc'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 |
| Prudential Plc vs. STMicroelectronics NV | Prudential Plc vs. Uber Technologies | Prudential Plc vs. Unity Software | Prudential Plc vs. Agilent 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 CEOs Directory module to screen CEOs from public companies around the world.
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