Correlation Between Agilent Technologies and ALLEGROEU
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and ALLEGROEU 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 ALLEGROEU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and ALLEGROEU ZY 01, you can compare the effects of market volatilities on Agilent Technologies and ALLEGROEU 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 ALLEGROEU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and ALLEGROEU.
Diversification Opportunities for Agilent Technologies and ALLEGROEU
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agilent and ALLEGROEU is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and ALLEGROEU ZY 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLEGROEU ZY 01 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 ALLEGROEU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLEGROEU ZY 01 has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and ALLEGROEU go up and down completely randomly.
Pair Corralation between Agilent Technologies and ALLEGROEU
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.7 times more return on investment than ALLEGROEU. However, Agilent Technologies is 1.42 times less risky than ALLEGROEU. It trades about 0.5 of its potential returns per unit of risk. ALLEGROEU ZY 01 is currently generating about 0.01 per unit of risk. If you would invest 12,762 in Agilent Technologies on October 21, 2024 and sell it today you would earn a total of 1,290 from holding Agilent Technologies or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. ALLEGROEU ZY 01
Performance |
| Timeline |
| Agilent Technologies |
| ALLEGROEU ZY 01 |
Agilent Technologies and ALLEGROEU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and ALLEGROEU
The main advantage of trading using opposite Agilent Technologies and ALLEGROEU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, ALLEGROEU 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 ALLEGROEU will offset losses from the drop in ALLEGROEU'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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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