Correlation Between Dow Jones and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Agilent Technologies, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Agilent Technologies.
Diversification Opportunities for Dow Jones and Agilent Technologies
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Agilent is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Agilent Technologies go up and down completely randomly.
Pair Corralation between Dow Jones and Agilent Technologies
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.2 times less return on investment than Agilent Technologies. But when comparing it to its historical volatility, Dow Jones Industrial is 1.99 times less risky than Agilent Technologies. It trades about 0.19 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 13,544 in Agilent Technologies on October 25, 2024 and sell it today you would earn a total of 1,745 from holding Agilent Technologies or generate 12.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Agilent Technologies
Performance |
| Timeline |
Dow Jones and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Agilent Technologies
Pair trading matchups for Agilent Technologies
Pair Trading with Dow Jones and Agilent Technologies
The main advantage of trading using opposite Dow Jones and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
| Agilent Technologies vs. Grand Vision Media | Agilent Technologies vs. Norman Broadbent Plc | Agilent Technologies vs. Solstad Offshore ASA | Agilent Technologies vs. One Media iP |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |