Correlation Between Agilent Technologies and Focus Home
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Focus Home 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 Focus Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Focus Home Interactive, you can compare the effects of market volatilities on Agilent Technologies and Focus Home 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 Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Focus Home.
Diversification Opportunities for Agilent Technologies and Focus Home
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agilent and Focus is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive 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 Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Focus Home go up and down completely randomly.
Pair Corralation between Agilent Technologies and Focus Home
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.34 times more return on investment than Focus Home. However, Agilent Technologies is 2.95 times less risky than Focus Home. It trades about 0.05 of its potential returns per unit of risk. Focus Home Interactive is currently generating about -0.01 per unit of risk. If you would invest 10,564 in Agilent Technologies on October 30, 2024 and sell it today you would earn a total of 3,828 from holding Agilent Technologies or generate 36.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Agilent Technologies vs. Focus Home Interactive
Performance |
| Timeline |
| Agilent Technologies |
| Focus Home Interactive |
Agilent Technologies and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Focus Home
The main advantage of trading using opposite Agilent Technologies and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Focus Home 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 Focus Home will offset losses from the drop in Focus Home's long position.| Agilent Technologies vs. SINGAPORE AIRLINES | Agilent Technologies vs. MPH Health Care | Agilent Technologies vs. EPSILON HEALTHCARE LTD | Agilent Technologies vs. AEGEAN AIRLINES |
| Focus Home vs. Hua Hong Semiconductor | Focus Home vs. SK TELECOM TDADR | Focus Home vs. Comba Telecom Systems | Focus Home vs. Charter Communications |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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