Correlation Between Agilent Technologies and Ford

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

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

Diversification Opportunities for Agilent Technologies and Ford

-0.57
  Correlation Coefficient
Agilent Technologies
Ford Motor

Excellent diversification

The 3 months correlation between Agilent and Ford is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Ford Motor in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor 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 Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Ford go up and down completely randomly.

Pair Corralation between Agilent Technologies and Ford

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 1.44 times less return on investment than Ford. But when comparing it to its historical volatility, Agilent Technologies is 1.66 times less risky than Ford. It trades about 0.08 of its potential returns per unit of risk. Ford Motor is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  881.00  in Ford Motor on August 30, 2021 and sell it today you would earn a total of  1,094  from holding Ford Motor or generate 124.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Agilent Technologies  vs.  Ford Motor

 Performance (%) 
      Timeline 
Agilent Technologies 
Agilent Performance
0 of 100
Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2021. The current disturbance may also be a sign of long term up-swing for the company investors.

Agilent Price Channel

Ford Motor 
Ford Performance
20 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Ford exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ford Price Channel

Agilent Technologies and Ford Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Agilent Technologies and Ford

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

Ford Motor

Pair trading matchups for Ford

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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