Correlation Between Roper Technologies and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Roper Technologies 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 Roper Technologies and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roper Technologies Common and Agilent Technologies, you can compare the effects of market volatilities on Roper Technologies 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 Roper Technologies with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies and Agilent Technologies.
Diversification Opportunities for Roper Technologies and Agilent Technologies
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Roper and Agilent is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies Common and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Roper 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 Roper Technologies Common 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 Roper Technologies i.e., Roper Technologies and Agilent Technologies go up and down completely randomly.
Pair Corralation between Roper Technologies and Agilent Technologies
Considering the 90-day investment horizon Roper Technologies Common is expected to generate 0.62 times more return on investment than Agilent Technologies. However, Roper Technologies Common is 1.62 times less risky than Agilent Technologies. It trades about 0.08 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.01 per unit of risk. If you would invest 39,960 in Roper Technologies Common on January 26, 2024 and sell it today you would earn a total of 13,841 from holding Roper Technologies Common or generate 34.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roper Technologies Common vs. Agilent Technologies
Performance |
| Timeline |
| Roper Technologies Common |
| Agilent Technologies |
Roper Technologies and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roper Technologies and Agilent Technologies
The main advantage of trading using opposite Roper Technologies and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies 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.| Roper Technologies vs. Manhattan Associates | Roper Technologies vs. ANSYS Inc | Roper Technologies vs. Guidewire Software | Roper Technologies vs. SAP SE ADR |
| Agilent Technologies vs. Fonar | Agilent Technologies vs. Burning Rock BiotechLtd | Agilent Technologies vs. Sera Prognostics | Agilent Technologies vs. Psychemedics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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