Correlation Between Agilent Technologies and Ametek
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Ametek 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 Ametek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Ametek Inc, you can compare the effects of market volatilities on Agilent Technologies and Ametek 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 Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Ametek.
Diversification Opportunities for Agilent Technologies and Ametek
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agilent and Ametek is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc 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 Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Ametek go up and down completely randomly.
Pair Corralation between Agilent Technologies and Ametek
Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Ametek. In addition to that, Agilent Technologies is 2.27 times more volatile than Ametek Inc. It trades about -0.11 of its total potential returns per unit of risk. Ametek Inc is currently generating about -0.15 per unit of volatility. If you would invest 18,276 in Ametek Inc on January 25, 2024 and sell it today you would lose (461.00) from holding Ametek Inc or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Ametek Inc
Performance |
| Timeline |
| Agilent Technologies |
| Ametek Inc |
Agilent Technologies and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Ametek
The main advantage of trading using opposite Agilent Technologies and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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