Correlation Between Delta Air and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Delta Air 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 Delta Air and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and Agilent Technologies, you can compare the effects of market volatilities on Delta Air 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 Delta Air with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Agilent Technologies.
Diversification Opportunities for Delta Air and Agilent Technologies
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Delta and Agilent is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Delta Air 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 Delta Air Lines 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 Delta Air i.e., Delta Air and Agilent Technologies go up and down completely randomly.
Pair Corralation between Delta Air and Agilent Technologies
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 1.1 times more return on investment than Agilent Technologies. However, Delta Air is 1.1 times more volatile than Agilent Technologies. It trades about 0.09 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.01 per unit of risk. If you would invest 17,185 in Delta Air Lines on September 13, 2024 and sell it today you would earn a total of 20,599 from holding Delta Air Lines or generate 119.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.05% |
| Values | Daily Returns |
Delta Air Lines vs. Agilent Technologies
Performance |
| Timeline |
| Delta Air Lines |
| Agilent Technologies |
Delta Air and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Agilent Technologies
The main advantage of trading using opposite Delta Air and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air 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.| Delta Air vs. Southwest Airlines Co | Delta Air vs. United Airlines Holdings | Delta Air vs. American Airlines Group |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |