Correlation Between JLEN Environmental and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental 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 JLEN Environmental and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JLEN Environmental Assets and Agilent Technologies, you can compare the effects of market volatilities on JLEN Environmental 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 JLEN Environmental with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Agilent Technologies.
Diversification Opportunities for JLEN Environmental and Agilent Technologies
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between JLEN and Agilent is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and JLEN Environmental 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 JLEN Environmental Assets 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 JLEN Environmental i.e., JLEN Environmental and Agilent Technologies go up and down completely randomly.
Pair Corralation between JLEN Environmental and Agilent Technologies
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Agilent Technologies. In addition to that, JLEN Environmental is 1.01 times more volatile than Agilent Technologies. It trades about -0.21 of its total potential returns per unit of risk. Agilent Technologies is currently generating about 0.15 per unit of volatility. If you would invest 13,162 in Agilent Technologies on October 24, 2024 and sell it today you would earn a total of 2,135 from holding Agilent Technologies or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Agilent Technologies
Performance |
| Timeline |
| JLEN Environmental Assets |
| Agilent Technologies |
JLEN Environmental and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Agilent Technologies
The main advantage of trading using opposite JLEN Environmental and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental 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.| JLEN Environmental vs. International Consolidated Airlines | JLEN Environmental vs. Light Science Technologies | JLEN Environmental vs. Sartorius Stedim Biotech | JLEN Environmental vs. DXC Technology Co |
| Agilent Technologies vs. Infrastrutture Wireless Italiane | Agilent Technologies vs. Iron Mountain | Agilent Technologies vs. JLEN Environmental Assets | Agilent Technologies vs. Cairo Communication SpA |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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