Correlation Between Visa and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Agilent Technologies, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Agilent Technologies.
Diversification Opportunities for Visa and Agilent Technologies
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Agilent is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Visa 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 Visa Class A 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 Visa i.e., Visa and Agilent Technologies go up and down completely randomly.
Pair Corralation between Visa and Agilent Technologies
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.75 times more return on investment than Agilent Technologies. However, Visa Class A is 1.33 times less risky than Agilent Technologies. It trades about 0.11 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.04 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.18% |
| Values | Daily Returns |
Visa Class A vs. Agilent Technologies
Performance |
| Timeline |
| Visa Class A |
| Agilent Technologies |
Visa and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Agilent Technologies
The main advantage of trading using opposite Visa and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Agilent Technologies vs. Danaher | Agilent Technologies vs. SIEMENS HEALTH ADR050 | Agilent Technologies vs. DexCom Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |