Correlation Between Agilent Technologies and Apyx Medical

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

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

Diversification Opportunities for Agilent Technologies and Apyx Medical

-0.43

Correlation Coefficient

Agilent Technologies  Apyx Medical

Very good diversification

The 3 months correlation between Agilent and Apyx is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Apyx Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apyx Medical 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 Apyx Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apyx Medical has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Apyx Medical go up and down completely randomly.

Pair Corralation between Agilent Technologies and Apyx Medical

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 1.82 times less return on investment than Apyx Medical. But when comparing it to its historical volatility, Agilent Technologies is 3.89 times less risky than Apyx Medical. It trades about 0.03 of its potential returns per unit of risk. Apyx Medical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  352.00  in Apyx Medical on February 9, 2024 and sell it today you would lose (217.00) from holding Apyx Medical or give up 61.65% of portfolio value over 90 days.

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

Agilent Technologies  vs.  Apyx Medical

Agilent Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Agilent Technologies may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Apyx Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apyx Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Agilent Technologies and Apyx Medical

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

The idea behind Agilent Technologies and Apyx Medical 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.