Correlation Between Devon Energy and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Devon Energy 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 Devon Energy and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Devon Energy and Agilent Technologies, you can compare the effects of market volatilities on Devon Energy 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 Devon Energy with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Devon Energy and Agilent Technologies.
Diversification Opportunities for Devon Energy and Agilent Technologies
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Devon and Agilent is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Devon Energy and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Devon Energy 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 Devon Energy 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 Devon Energy i.e., Devon Energy and Agilent Technologies go up and down completely randomly.
Pair Corralation between Devon Energy and Agilent Technologies
Assuming the 90 days trading horizon Devon Energy is expected to generate 0.51 times more return on investment than Agilent Technologies. However, Devon Energy is 1.97 times less risky than Agilent Technologies. It trades about 0.18 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.05 per unit of risk. If you would invest 22,132 in Devon Energy on August 27, 2024 and sell it today you would earn a total of 845.00 from holding Devon Energy or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Devon Energy vs. Agilent Technologies
Performance |
| Timeline |
| Devon Energy |
| Agilent Technologies |
Devon Energy and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Devon Energy and Agilent Technologies
The main advantage of trading using opposite Devon Energy and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Devon Energy 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.| Devon Energy vs. Agilent Technologies | Devon Energy vs. Bio Techne | Devon Energy vs. Spotify Technology SA | Devon Energy vs. Align Technology |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |