Correlation Between Agilent Technologies and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and WuXi AppTec 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 WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and WuXi AppTec Co, you can compare the effects of market volatilities on Agilent Technologies and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and WuXi AppTec.
Diversification Opportunities for Agilent Technologies and WuXi AppTec
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agilent and WuXi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and WuXi AppTec go up and down completely randomly.
Pair Corralation between Agilent Technologies and WuXi AppTec
Assuming the 90 days horizon Agilent Technologies is expected to generate 0.37 times more return on investment than WuXi AppTec. However, Agilent Technologies is 2.7 times less risky than WuXi AppTec. It trades about 0.26 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.01 per unit of risk. If you would invest 13,175 in Agilent Technologies on October 17, 2024 and sell it today you would earn a total of 725.00 from holding Agilent Technologies or generate 5.5% 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. WuXi AppTec Co
Performance |
| Timeline |
| Agilent Technologies |
| WuXi AppTec |
Agilent Technologies and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and WuXi AppTec
The main advantage of trading using opposite Agilent Technologies and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| Agilent Technologies vs. CENTURIA OFFICE REIT | Agilent Technologies vs. CITY OFFICE REIT | Agilent Technologies vs. OFFICE DEPOT | Agilent Technologies vs. H2O Retailing |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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