Correlation Between GX AI and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both GX AI and Agilent Technologies 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 GX AI and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GX AI TECH and Agilent Technologies, you can compare the effects of market volatilities on GX AI and Agilent Technologies 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 GX AI with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GX AI and Agilent Technologies.
Diversification Opportunities for GX AI and Agilent Technologies
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BAIQ39 and Agilent is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and GX AI 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 GX AI TECH are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of GX AI i.e., GX AI and Agilent Technologies go up and down completely randomly.
Pair Corralation between GX AI and Agilent Technologies
Assuming the 90 days trading horizon GX AI TECH is expected to generate 0.7 times more return on investment than Agilent Technologies. However, GX AI TECH is 1.44 times less risky than Agilent Technologies. It trades about 0.14 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.08 per unit of risk. If you would invest 4,745 in GX AI TECH on September 12, 2024 and sell it today you would earn a total of 3,269 from holding GX AI TECH or generate 68.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.78% |
| Values | Daily Returns |
GX AI TECH vs. Agilent Technologies
Performance |
| Timeline |
| GX AI TECH |
| Agilent Technologies |
GX AI and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GX AI and Agilent Technologies
The main advantage of trading using opposite GX AI and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| GX AI vs. Taiwan Semiconductor Manufacturing | GX AI vs. Apple Inc | GX AI vs. Alibaba Group Holding | GX AI vs. Microsoft |
| Agilent Technologies vs. DexCom Inc | Agilent Technologies vs. Fundo Investimento Imobiliario | Agilent Technologies vs. LESTE FDO INV | Agilent Technologies vs. Fras le SA |
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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