Correlation Between Agilent Technologies and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Xinhua Winshare 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 Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Agilent Technologies and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Xinhua Winshare.
Diversification Opportunities for Agilent Technologies and Xinhua Winshare
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agilent and Xinhua is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Agilent Technologies and Xinhua Winshare
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.79 times more return on investment than Xinhua Winshare. However, Agilent Technologies is 1.26 times less risky than Xinhua Winshare. It trades about 0.33 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.1 per unit of risk. If you would invest 13,128 in Agilent Technologies on November 5, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Agilent Technologies |
| Xinhua Winshare Publ |
Agilent Technologies and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Xinhua Winshare
The main advantage of trading using opposite Agilent Technologies and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| Agilent Technologies vs. COREBRIDGE FINANCIAL INC | Agilent Technologies vs. ON SEMICONDUCTOR | Agilent Technologies vs. Webster Financial | Agilent Technologies vs. UNIQA INSURANCE GR |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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