Correlation Between Agilent Technologies and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Canadian Utilities 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 Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Canadian Utilities Limited, you can compare the effects of market volatilities on Agilent Technologies and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Canadian Utilities.
Diversification Opportunities for Agilent Technologies and Canadian Utilities
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agilent and Canadian is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Canadian Utilities go up and down completely randomly.
Pair Corralation between Agilent Technologies and Canadian Utilities
Assuming the 90 days horizon Agilent Technologies is expected to generate 1.51 times more return on investment than Canadian Utilities. However, Agilent Technologies is 1.51 times more volatile than Canadian Utilities Limited. It trades about 0.08 of its potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.07 per unit of risk. If you would invest 12,502 in Agilent Technologies on November 3, 2024 and sell it today you would earn a total of 1,876 from holding Agilent Technologies or generate 15.01% 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. Canadian Utilities Limited
Performance |
| Timeline |
| Agilent Technologies |
| Canadian Utilities |
Agilent Technologies and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Canadian Utilities
The main advantage of trading using opposite Agilent Technologies and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Agilent Technologies vs. GRIFFIN MINING LTD | Agilent Technologies vs. Cal Maine Foods | Agilent Technologies vs. URBAN OUTFITTERS | Agilent Technologies vs. Zijin Mining Group |
| Canadian Utilities vs. Casio Computer CoLtd | Canadian Utilities vs. SBI Insurance Group | Canadian Utilities vs. The Hanover Insurance | Canadian Utilities vs. Singapore Reinsurance |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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