Correlation Between Agilent Technologies and Achieve Life

Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Achieve Life 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 Achieve Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agilent Technologies and Achieve Life Sciences, you can compare the effects of market volatilities on Agilent Technologies and Achieve Life 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 Achieve Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Achieve Life.

Diversification Opportunities for Agilent Technologies and Achieve Life

-0.06

Correlation Coefficient

Agilent Technologies  Achieve Life

Good diversification

The 3 months correlation between Agilent and Achieve is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Achieve Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Achieve Life Sciences 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 Achieve Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Achieve Life Sciences has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Achieve Life go up and down completely randomly.

Pair Corralation between Agilent Technologies and Achieve Life

Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Achieve Life. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.25 times less risky than Achieve Life. The stock trades about -0.27 of its potential returns per unit of risk. The Achieve Life Sciences is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  467.00  in Achieve Life Sciences on January 24, 2024 and sell it today you would lose (26.00) from holding Achieve Life Sciences or give up 5.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Agilent Technologies  vs.  Achieve Life Sciences

Agilent Technologies

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Agilent Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Achieve Life Sciences

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Achieve Life Sciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical indicators, Achieve Life is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Agilent Technologies and Achieve Life

The main advantage of trading using opposite Agilent Technologies and Achieve Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Achieve Life 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 Achieve Life will offset losses from the drop in Achieve Life's long position.

The idea behind Agilent Technologies and Achieve Life Sciences 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.