Correlation Between Young Cos and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Agilent Technologies, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Agilent Technologies.
Diversification Opportunities for Young Cos and Agilent Technologies
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Young and Agilent is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Agilent Technologies go up and down completely randomly.
Pair Corralation between Young Cos and Agilent Technologies
Assuming the 90 days trading horizon Young Cos Brewery is expected to under-perform the Agilent Technologies. In addition to that, Young Cos is 1.38 times more volatile than Agilent Technologies. It trades about -0.11 of its total potential returns per unit of risk. Agilent Technologies is currently generating about 0.42 per unit of volatility. If you would invest 13,387 in Agilent Technologies on October 24, 2024 and sell it today you would earn a total of 1,902 from holding Agilent Technologies or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Young Cos Brewery vs. Agilent Technologies
Performance |
| Timeline |
| Young Cos Brewery |
| Agilent Technologies |
Young Cos and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Agilent Technologies
The main advantage of trading using opposite Young Cos and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Ross Stores | Young Cos vs. JB Hunt Transport | Young Cos vs. Zurich Insurance Group | Young Cos vs. UNIQA Insurance Group |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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