Correlation Between Agilent Technologies and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Diamyd Medical 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 Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Diamyd Medical AB, you can compare the effects of market volatilities on Agilent Technologies and Diamyd Medical 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 Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Diamyd Medical.
Diversification Opportunities for Agilent Technologies and Diamyd Medical
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilent and Diamyd is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB 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 Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Diamyd Medical go up and down completely randomly.
Pair Corralation between Agilent Technologies and Diamyd Medical
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.59 times more return on investment than Diamyd Medical. However, Agilent Technologies is 1.69 times less risky than Diamyd Medical. It trades about 0.33 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.07 per unit of risk. If you would invest 13,128 in Agilent Technologies on November 7, 2024 and sell it today you would earn a total of 1,436 from holding Agilent Technologies or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Diamyd Medical AB
Performance |
| Timeline |
| Agilent Technologies |
| Diamyd Medical AB |
Agilent Technologies and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Diamyd Medical
The main advantage of trading using opposite Agilent Technologies and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.| Agilent Technologies vs. WuXi AppTec Co | Agilent Technologies vs. Thermo Fisher Scientific | Agilent Technologies vs. Danaher | Agilent Technologies vs. SIEMENS HEALTH ADR050 |
| Diamyd Medical vs. CVW CLEANTECH INC | Diamyd Medical vs. BII Railway Transportation | Diamyd Medical vs. ALERION CLEANPOWER | Diamyd Medical vs. Yuexiu Transport Infrastructure |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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