Correlation Between Agilent Technologies and Laboratory
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Laboratory 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 Agilent Technologies and Laboratory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Laboratory of, you can compare the effects of market volatilities on Agilent Technologies and Laboratory 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 Agilent Technologies with a short position of Laboratory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Laboratory.
Diversification Opportunities for Agilent Technologies and Laboratory
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agilent and Laboratory is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Laboratory of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratory and Agilent Technologies 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 Agilent Technologies are associated (or correlated) with Laboratory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratory has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Laboratory go up and down completely randomly.
Pair Corralation between Agilent Technologies and Laboratory
Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Laboratory. In addition to that, Agilent Technologies is 1.68 times more volatile than Laboratory of. It trades about -0.28 of its total potential returns per unit of risk. Laboratory of is currently generating about -0.29 per unit of volatility. If you would invest 21,097 in Laboratory of on January 19, 2024 and sell it today you would lose (1,100) from holding Laboratory of or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Laboratory of
Performance |
| Timeline |
| Agilent Technologies |
| Laboratory |
Agilent Technologies and Laboratory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Laboratory
The main advantage of trading using opposite Agilent Technologies and Laboratory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Laboratory 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 Laboratory will offset losses from the drop in Laboratory's long position.| Agilent Technologies vs. Danaher | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Guardant Health | Agilent Technologies vs. Charles River Laboratories |
| Laboratory vs. Illumina | Laboratory vs. Twist Bioscience Corp | Laboratory vs. Myriad Genetics | Laboratory vs. Agilent Technologies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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