Correlation Between IShares SPTSX and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX 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 IShares SPTSX and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX Capped and Agilent Technologies, you can compare the effects of market volatilities on IShares SPTSX 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 IShares SPTSX with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Agilent Technologies.
Diversification Opportunities for IShares SPTSX and Agilent Technologies
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Agilent is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and IShares SPTSX 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 iShares SPTSX Capped 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 IShares SPTSX i.e., IShares SPTSX and Agilent Technologies go up and down completely randomly.
Pair Corralation between IShares SPTSX and Agilent Technologies
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to generate 0.66 times more return on investment than Agilent Technologies. However, iShares SPTSX Capped is 1.52 times less risky than Agilent Technologies. It trades about -0.17 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.12 per unit of risk. If you would invest 1,546 in iShares SPTSX Capped on January 26, 2024 and sell it today you would lose (63.00) from holding iShares SPTSX Capped or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Agilent Technologies
Performance |
| Timeline |
| iShares SPTSX Capped |
| Agilent Technologies |
IShares SPTSX and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Agilent Technologies
The main advantage of trading using opposite IShares SPTSX and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX 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.| IShares SPTSX vs. Horizons Equal Weight | IShares SPTSX vs. Horizons Cdn High | IShares SPTSX vs. Horizons Laddered Canadian | IShares SPTSX vs. Horizons Intl Developed |
| Agilent Technologies vs. Fonar | Agilent Technologies vs. Burning Rock BiotechLtd | Agilent Technologies vs. Sera Prognostics | Agilent Technologies vs. Psychemedics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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