Correlation Between Agilent Technologies and Adkins Energy

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

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

Diversification Opportunities for Agilent Technologies and Adkins Energy

0.83

Correlation Coefficient

Agilent Technologies  Adkins Energy

Very poor diversification

The 3 months correlation between Agilent and Adkins is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Adkins Energy LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adkins Energy LLC 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 Adkins Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adkins Energy LLC has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Adkins Energy go up and down completely randomly.

Pair Corralation between Agilent Technologies and Adkins Energy

If you would invest  40,100  in Adkins Energy LLC on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Adkins Energy LLC or generate 0.0% return on investment over 90 days.

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

Agilent Technologies  vs.  Adkins Energy LLC

Agilent Technologies

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 4 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Adkins Energy LLC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adkins Energy LLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, Adkins Energy may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Agilent Technologies and Adkins Energy

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

The idea behind Agilent Technologies and Adkins Energy LLC 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.