Correlation Between Transport International and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Transport International 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 Transport International and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and Agilent Technologies, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Agilent Technologies.
Diversification Opportunities for Transport International and Agilent Technologies
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transport and Agilent is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Transport International 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 Transport International Holdings 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 Transport International i.e., Transport International and Agilent Technologies go up and down completely randomly.
Pair Corralation between Transport International and Agilent Technologies
Assuming the 90 days horizon Transport International Holdings is expected to generate 2.77 times more return on investment than Agilent Technologies. However, Transport International is 2.77 times more volatile than Agilent Technologies. It trades about 0.06 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.01 per unit of risk. If you would invest 31.00 in Transport International Holdings on November 8, 2024 and sell it today you would earn a total of 64.00 from holding Transport International Holdings or generate 206.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. Agilent Technologies
Performance |
| Timeline |
| Transport International |
| Agilent Technologies |
Transport International and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Agilent Technologies
The main advantage of trading using opposite Transport International and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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.| Transport International vs. ScanSource | Transport International vs. United Breweries Co | Transport International vs. Titan Machinery | Transport International vs. Monster Beverage Corp |
| Agilent Technologies vs. UNICREDIT SPA ADR | Agilent Technologies vs. SBI Insurance Group | Agilent Technologies vs. Meta Financial Group | Agilent Technologies vs. INSURANCE AUST GRP |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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