Correlation Between Dupont De and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Agilent Technologies, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Agilent Technologies.
Diversification Opportunities for Dupont De and Agilent Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and Agilent is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Agilent Technologies go up and down completely randomly.
Pair Corralation between Dupont De and Agilent Technologies
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.76 times more return on investment than Agilent Technologies. However, Dupont De Nemours is 1.32 times less risky than Agilent Technologies. It trades about -0.12 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.27 per unit of risk. If you would invest 7,594 in Dupont De Nemours on January 24, 2024 and sell it today you would lose (203.00) from holding Dupont De Nemours or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Agilent Technologies
Performance |
| Timeline |
| Dupont De Nemours |
| Agilent Technologies |
Dupont De and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Agilent Technologies
The main advantage of trading using opposite Dupont De and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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