Correlation Between Evoke Pharma and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Evoke Pharma 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 Evoke Pharma and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evoke Pharma and Agilent Technologies, you can compare the effects of market volatilities on Evoke Pharma 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 Evoke Pharma with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evoke Pharma and Agilent Technologies.
Diversification Opportunities for Evoke Pharma and Agilent Technologies
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evoke and Agilent is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Evoke Pharma and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Evoke Pharma 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 Evoke Pharma 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 Evoke Pharma i.e., Evoke Pharma and Agilent Technologies go up and down completely randomly.
Pair Corralation between Evoke Pharma and Agilent Technologies
Given the investment horizon of 90 days Evoke Pharma is expected to under-perform the Agilent Technologies. In addition to that, Evoke Pharma is 3.3 times more volatile than Agilent Technologies. It trades about -0.04 of its total potential returns per unit of risk. Agilent Technologies is currently generating about 0.01 per unit of volatility. If you would invest 12,954 in Agilent Technologies on January 19, 2024 and sell it today you would earn a total of 501.00 from holding Agilent Technologies or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evoke Pharma vs. Agilent Technologies
Performance |
| Timeline |
| Evoke Pharma |
| Agilent Technologies |
Evoke Pharma and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evoke Pharma and Agilent Technologies
The main advantage of trading using opposite Evoke Pharma and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evoke Pharma 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.The idea behind Evoke Pharma and Agilent Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Agilent Technologies vs. Danaher | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Guardant Health | Agilent Technologies vs. Charles River Laboratories |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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