Correlation Between Agilent Technologies and Starbucks
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Starbucks 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 Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Starbucks, you can compare the effects of market volatilities on Agilent Technologies and Starbucks 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 Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Starbucks.
Diversification Opportunities for Agilent Technologies and Starbucks
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agilent and Starbucks is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks 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 Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Starbucks go up and down completely randomly.
Pair Corralation between Agilent Technologies and Starbucks
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.46 times more return on investment than Starbucks. However, Agilent Technologies is 2.16 times less risky than Starbucks. It trades about -0.24 of its potential returns per unit of risk. Starbucks is currently generating about -0.24 per unit of risk. If you would invest 13,522 in Agilent Technologies on October 10, 2024 and sell it today you would lose (446.00) from holding Agilent Technologies or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Agilent Technologies vs. Starbucks
Performance |
| Timeline |
| Agilent Technologies |
| Starbucks |
Agilent Technologies and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Starbucks
The main advantage of trading using opposite Agilent Technologies and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| Agilent Technologies vs. MCEWEN MINING INC | Agilent Technologies vs. GALENA MINING LTD | Agilent Technologies vs. Telecom Argentina SA | Agilent Technologies vs. HUTCHISON TELECOMM |
| Starbucks vs. Superior Plus Corp | Starbucks vs. NMI Holdings | Starbucks vs. SIVERS SEMICONDUCTORS AB | Starbucks vs. Talanx AG |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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