Correlation Between Energisa and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Energisa 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 Energisa and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Agilent Technologies, you can compare the effects of market volatilities on Energisa 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 Energisa with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Agilent Technologies.
Diversification Opportunities for Energisa and Agilent Technologies
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energisa and Agilent is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Energisa 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 Energisa SA 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 Energisa i.e., Energisa and Agilent Technologies go up and down completely randomly.
Pair Corralation between Energisa and Agilent Technologies
Assuming the 90 days trading horizon Energisa SA is expected to generate 4.28 times more return on investment than Agilent Technologies. However, Energisa is 4.28 times more volatile than Agilent Technologies. It trades about 0.11 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.21 per unit of risk. If you would invest 3,884 in Energisa SA on November 29, 2024 and sell it today you would earn a total of 167.00 from holding Energisa SA or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Energisa SA vs. Agilent Technologies
Performance |
| Timeline |
| Energisa SA |
| Agilent Technologies |
Energisa and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Agilent Technologies
The main advantage of trading using opposite Energisa and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa 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.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Agilent Technologies vs. ZoomInfo Technologies | Agilent Technologies vs. Bio Techne | Agilent Technologies vs. Elevance Health, | Agilent Technologies vs. Healthpeak Properties |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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