Correlation Between Agilent Technologies and Suntory Beverage
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Suntory Beverage 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 Suntory Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Suntory Beverage Food, you can compare the effects of market volatilities on Agilent Technologies and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Suntory Beverage.
Diversification Opportunities for Agilent Technologies and Suntory Beverage
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agilent and Suntory is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Suntory Beverage go up and down completely randomly.
Pair Corralation between Agilent Technologies and Suntory Beverage
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.7 times more return on investment than Suntory Beverage. However, Agilent Technologies is 1.42 times less risky than Suntory Beverage. It trades about 0.44 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about -0.12 per unit of risk. If you would invest 12,844 in Agilent Technologies on October 20, 2024 and sell it today you would earn a total of 1,208 from holding Agilent Technologies or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Suntory Beverage Food
Performance |
| Timeline |
| Agilent Technologies |
| Suntory Beverage Food |
Agilent Technologies and Suntory Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Suntory Beverage
The main advantage of trading using opposite Agilent Technologies and Suntory Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Suntory Beverage 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 Suntory Beverage will offset losses from the drop in Suntory Beverage's long position.| Agilent Technologies vs. WuXi AppTec Co | Agilent Technologies vs. Danaher | Agilent Technologies vs. Danaher | Agilent Technologies vs. SIEMENS HEALTH ADR050 |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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