Correlation Between Agilent Technologies and Target
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Target 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 Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Target, you can compare the effects of market volatilities on Agilent Technologies and Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Target.
Diversification Opportunities for Agilent Technologies and Target
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agilent and Target is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Target go up and down completely randomly.
Pair Corralation between Agilent Technologies and Target
Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Target. In addition to that, Agilent Technologies is 1.54 times more volatile than Target. It trades about -0.11 of its total potential returns per unit of risk. Target is currently generating about -0.13 per unit of volatility. If you would invest 17,266 in Target on January 24, 2024 and sell it today you would lose (555.00) from holding Target or give up 3.21% 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. Target
Performance |
Timeline |
Agilent Technologies |
Target |
Agilent Technologies and Target Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Agilent Technologies and Target
The main advantage of trading using opposite Agilent Technologies and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.Agilent Technologies vs. Nuvation Bio | Agilent Technologies vs. Lyell Immunopharma | Agilent Technologies vs. Century Therapeutics | Agilent Technologies vs. Generation BioCo |
Target vs. Big Lots | Target vs. Aquagold International | Target vs. Thrivent High Yield | Target vs. Morningstar Unconstrained Allocation |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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