Correlation Between Agilent Technologies and Disney
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Disney 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 Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Walt Disney, you can compare the effects of market volatilities on Agilent Technologies and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Disney.
Diversification Opportunities for Agilent Technologies and Disney
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilent and Disney is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Disney go up and down completely randomly.
Pair Corralation between Agilent Technologies and Disney
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 1.4 times more return on investment than Disney. However, Agilent Technologies is 1.4 times more volatile than Walt Disney. It trades about -0.11 of its potential returns per unit of risk. Walt Disney is currently generating about -0.18 per unit of risk. If you would invest 14,532 in Agilent Technologies on January 25, 2024 and sell it today you would lose (612.00) from holding Agilent Technologies or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Walt Disney
Performance |
| Timeline |
| Agilent Technologies |
| Walt Disney |
Agilent Technologies and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Disney
The main advantage of trading using opposite Agilent Technologies and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| Agilent Technologies vs. Nuvation Bio | Agilent Technologies vs. Lyell Immunopharma | Agilent Technologies vs. Century Therapeutics | Agilent Technologies vs. Generation BioCo |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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