Correlation Between Agilent Technologies and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Auto Trader 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 Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Auto Trader Group, you can compare the effects of market volatilities on Agilent Technologies and Auto Trader 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 Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Auto Trader.
Diversification Opportunities for Agilent Technologies and Auto Trader
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Auto is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group 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 Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Auto Trader go up and down completely randomly.
Pair Corralation between Agilent Technologies and Auto Trader
Assuming the 90 days horizon Agilent Technologies is expected to generate 1.07 times more return on investment than Auto Trader. However, Agilent Technologies is 1.07 times more volatile than Auto Trader Group. It trades about 0.55 of its potential returns per unit of risk. Auto Trader Group is currently generating about -0.07 per unit of risk. If you would invest 12,937 in Agilent Technologies on October 25, 2024 and sell it today you would earn a total of 1,685 from holding Agilent Technologies or generate 13.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Auto Trader Group
Performance |
| Timeline |
| Agilent Technologies |
| Auto Trader Group |
Agilent Technologies and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Auto Trader
The main advantage of trading using opposite Agilent Technologies and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| Agilent Technologies vs. SCIENCE IN SPORT | Agilent Technologies vs. Air Transport Services | Agilent Technologies vs. ANTA SPORTS PRODUCT | Agilent Technologies vs. LG Display Co |
| Auto Trader vs. NAKED WINES PLC | Auto Trader vs. Agilent Technologies | Auto Trader vs. CLEAN ENERGY FUELS | Auto Trader vs. Firan Technology Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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