Correlation Between Agilent Technologies and Roper Technologies
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Roper 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 Agilent Technologies and Roper Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Roper Technologies Common, you can compare the effects of market volatilities on Agilent Technologies and Roper 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 Agilent Technologies with a short position of Roper Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Roper Technologies.
Diversification Opportunities for Agilent Technologies and Roper Technologies
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agilent and Roper is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Roper Technologies Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies Common 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 Roper Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roper Technologies Common has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Roper Technologies go up and down completely randomly.
Pair Corralation between Agilent Technologies and Roper Technologies
Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Roper Technologies. In addition to that, Agilent Technologies is 1.87 times more volatile than Roper Technologies Common. It trades about -0.34 of its total potential returns per unit of risk. Roper Technologies Common is currently generating about -0.28 per unit of volatility. If you would invest 55,330 in Roper Technologies Common on January 20, 2024 and sell it today you would lose (2,603) from holding Roper Technologies Common or give up 4.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Agilent Technologies vs. Roper Technologies Common
Performance |
| Timeline |
| Agilent Technologies |
| Roper Technologies Common |
Agilent Technologies and Roper Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Roper Technologies
The main advantage of trading using opposite Agilent Technologies and Roper Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Roper 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 Roper Technologies will offset losses from the drop in Roper Technologies' long position.| Agilent Technologies vs. Oric PharmaceuticalsInc | Agilent Technologies vs. Anebulo Pharmaceuticals | Agilent Technologies vs. Cullinan Oncology LLC | Agilent Technologies vs. C4 TherapeuticsInc |
| Roper Technologies vs. Manhattan Associates | Roper Technologies vs. ANSYS Inc | Roper Technologies vs. Guidewire Software | Roper Technologies vs. SAP SE ADR |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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