Correlation Between Precious Metals and Agilent Technologies

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Can any of the company-specific risk be diversified away by investing in both Precious Metals 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 Precious Metals and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Metals And and Agilent Technologies, you can compare the effects of market volatilities on Precious Metals 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 Precious Metals with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Metals and Agilent Technologies.

Diversification Opportunities for Precious Metals and Agilent Technologies

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Precious and Agilent is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PRECIOUS METALS AND and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Precious Metals 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 Precious Metals And 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 Precious Metals i.e., Precious Metals and Agilent Technologies go up and down completely randomly.

Pair Corralation between Precious Metals and Agilent Technologies

Assuming the 90 days horizon Precious Metals And is expected to generate 1.25 times more return on investment than Agilent Technologies. However, Precious Metals is 1.25 times more volatile than Agilent Technologies. It trades about 0.47 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.36 per unit of risk. If you would invest  1,428  in Precious Metals And on December 29, 2023 and sell it today you would earn a total of  270.00  from holding Precious Metals And or generate 18.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

PRECIOUS METALS AND  vs.  Agilent Technologies

 Performance 
       Timeline  
Precious Metals And 

Risk-Adjusted Performance

0 of 100

 
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High
Very Weak
Over the last 90 days Precious Metals And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Precious Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Agilent Technologies 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Agilent Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Precious Metals and Agilent Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Precious Metals and Agilent Technologies

The main advantage of trading using opposite Precious Metals and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Metals 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 Precious Metals And 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.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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