Correlation Between Companhia Siderrgica and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica 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 Companhia Siderrgica and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Siderrgica Nacional and Agilent Technologies, you can compare the effects of market volatilities on Companhia Siderrgica 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 Companhia Siderrgica with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and Agilent Technologies.
Diversification Opportunities for Companhia Siderrgica and Agilent Technologies
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Companhia and Agilent is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Companhia Siderrgica 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 Companhia Siderrgica Nacional 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 Companhia Siderrgica i.e., Companhia Siderrgica and Agilent Technologies go up and down completely randomly.
Pair Corralation between Companhia Siderrgica and Agilent Technologies
Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to generate 1.47 times more return on investment than Agilent Technologies. However, Companhia Siderrgica is 1.47 times more volatile than Agilent Technologies. It trades about -0.02 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.05 per unit of risk. If you would invest 1,148 in Companhia Siderrgica Nacional on August 28, 2024 and sell it today you would lose (23.00) from holding Companhia Siderrgica Nacional or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderrgica Nacional vs. Agilent Technologies
Performance |
| Timeline |
| Companhia Siderrgica |
| Agilent Technologies |
Companhia Siderrgica and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderrgica and Agilent Technologies
The main advantage of trading using opposite Companhia Siderrgica and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderrgica 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.| Companhia Siderrgica vs. Metalurgica Gerdau SA | Companhia Siderrgica vs. Apartment Investment and | Companhia Siderrgica vs. CVS Health | Companhia Siderrgica vs. METISA Metalrgica Timboense |
| Agilent Technologies vs. Raytheon Technologies | Agilent Technologies vs. Dell Technologies | Agilent Technologies vs. METISA Metalrgica Timboense | Agilent Technologies vs. Monster Beverage |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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