Correlation Between Agilent Technologies and DermTech
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and DermTech 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 DermTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and DermTech, you can compare the effects of market volatilities on Agilent Technologies and DermTech 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 DermTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and DermTech.
Diversification Opportunities for Agilent Technologies and DermTech
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agilent and DermTech is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and DermTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DermTech 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 DermTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DermTech has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and DermTech go up and down completely randomly.
Pair Corralation between Agilent Technologies and DermTech
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.23 times more return on investment than DermTech. However, Agilent Technologies is 4.41 times less risky than DermTech. It trades about 0.03 of its potential returns per unit of risk. DermTech is currently generating about -0.25 per unit of risk. If you would invest 13,182 in Agilent Technologies on January 24, 2024 and sell it today you would earn a total of 209.00 from holding Agilent Technologies or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. DermTech
Performance |
| Timeline |
| Agilent Technologies |
| DermTech |
Agilent Technologies and DermTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and DermTech
The main advantage of trading using opposite Agilent Technologies and DermTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, DermTech 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 DermTech will offset losses from the drop in DermTech's long position.| Agilent Technologies vs. Nuvation Bio | Agilent Technologies vs. Lyell Immunopharma | Agilent Technologies vs. Century Therapeutics | Agilent Technologies vs. Generation BioCo |
| DermTech vs. TransMedics Group | DermTech vs. Curiositystream | DermTech vs. Fulgent Genetics | DermTech vs. Outset MedicalInc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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