Correlation Between Agilent Technologies and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Airbus SE 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 Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Airbus SE, you can compare the effects of market volatilities on Agilent Technologies and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Airbus SE.
Diversification Opportunities for Agilent Technologies and Airbus SE
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilent and Airbus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Airbus SE go up and down completely randomly.
Pair Corralation between Agilent Technologies and Airbus SE
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.89 times more return on investment than Airbus SE. However, Agilent Technologies is 1.13 times less risky than Airbus SE. It trades about 0.53 of its potential returns per unit of risk. Airbus SE is currently generating about 0.27 per unit of risk. If you would invest 12,881 in Agilent Technologies on October 24, 2024 and sell it today you would earn a total of 1,389 from holding Agilent Technologies or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Agilent Technologies vs. Airbus SE
Performance |
| Timeline |
| Agilent Technologies |
| Airbus SE |
Agilent Technologies and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Airbus SE
The main advantage of trading using opposite Agilent Technologies and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Agilent Technologies vs. Broadridge Financial Solutions | Agilent Technologies vs. Broadwind | Agilent Technologies vs. ScanSource | Agilent Technologies vs. Molson Coors Beverage |
| Airbus SE vs. MCEWEN MINING INC | Airbus SE vs. ANGLO ASIAN MINING | Airbus SE vs. Motorcar Parts of | Airbus SE vs. Harmony Gold Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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