Correlation Between Align Technology and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Align Technology and Agilent Technologies 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 Align Technology and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Agilent Technologies, you can compare the effects of market volatilities on Align Technology and Agilent Technologies 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 Align Technology with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Agilent Technologies.
Diversification Opportunities for Align Technology and Agilent Technologies
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Align and Agilent is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Align Technology 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 Align Technology are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Align Technology i.e., Align Technology and Agilent Technologies go up and down completely randomly.
Pair Corralation between Align Technology and Agilent Technologies
Assuming the 90 days trading horizon Align Technology is expected to generate 1.41 times more return on investment than Agilent Technologies. However, Align Technology is 1.41 times more volatile than Agilent Technologies. It trades about 0.05 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.07 per unit of risk. If you would invest 26,936 in Align Technology on August 26, 2024 and sell it today you would earn a total of 5,800 from holding Align Technology or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.05% |
| Values | Daily Returns |
Align Technology vs. Agilent Technologies
Performance |
| Timeline |
| Align Technology |
| Agilent Technologies |
Align Technology and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Agilent Technologies
The main advantage of trading using opposite Align Technology and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Align Technology vs. Abbott Laboratories | Align Technology vs. Boston Scientific | Align Technology vs. Energisa SA | Align Technology vs. BTG Pactual Logstica |
| Agilent Technologies vs. Fras le SA | Agilent Technologies vs. Western Digital | Agilent Technologies vs. Clave Indices De | Agilent Technologies vs. BTG Pactual Logstica |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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