Correlation Between Agilent Technologies and Biovie

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

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

Diversification Opportunities for Agilent Technologies and Biovie

-0.4

Correlation Coefficient

Agilent Technologies  Biovie

Very good diversification

The 3 months correlation between Agilent and Biovie is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Biovie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biovie Inc 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 Biovie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biovie Inc has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Biovie go up and down completely randomly.

Pair Corralation between Agilent Technologies and Biovie

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 1.98 times less return on investment than Biovie. But when comparing it to its historical volatility, Agilent Technologies is 4.74 times less risky than Biovie. It trades about 0.03 of its potential returns per unit of risk. Biovie Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  198.00  in Biovie Inc on February 23, 2024 and sell it today you would lose (152.00) from holding Biovie Inc or give up 76.77% 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.  Biovie Inc

Agilent Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Agilent Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Biovie Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biovie Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Agilent Technologies and Biovie

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

The idea behind Agilent Technologies and Biovie Inc 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.