Correlation Between Data Modul and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Data Modul 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 Data Modul and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data Modul AG and Agilent Technologies, you can compare the effects of market volatilities on Data Modul 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 Data Modul with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and Agilent Technologies.
Diversification Opportunities for Data Modul and Agilent Technologies
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Data and Agilent is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Data Modul 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 Data Modul AG 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 Data Modul i.e., Data Modul and Agilent Technologies go up and down completely randomly.
Pair Corralation between Data Modul and Agilent Technologies
Assuming the 90 days trading horizon Data Modul AG is expected to under-perform the Agilent Technologies. In addition to that, Data Modul is 1.53 times more volatile than Agilent Technologies. It trades about -0.1 of its total potential returns per unit of risk. Agilent Technologies is currently generating about 0.25 per unit of volatility. If you would invest 12,842 in Agilent Technologies on October 30, 2024 and sell it today you would earn a total of 1,660 from holding Agilent Technologies or generate 12.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data Modul AG vs. Agilent Technologies
Performance |
| Timeline |
| Data Modul AG |
| Agilent Technologies |
Data Modul and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data Modul and Agilent Technologies
The main advantage of trading using opposite Data Modul and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Modul 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.The idea behind Data Modul AG and Agilent Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Agilent Technologies vs. SINGAPORE AIRLINES | Agilent Technologies vs. MPH Health Care | Agilent Technologies vs. EPSILON HEALTHCARE LTD | Agilent Technologies vs. AEGEAN AIRLINES |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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