Correlation Between Agilent Technologies and ATT

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

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

Diversification Opportunities for Agilent Technologies and ATT

-0.41

Correlation Coefficient

Agilent Technologies  ATT

Very good diversification

The 3 months correlation between Agilent and ATT is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and ATT go up and down completely randomly.

Pair Corralation between Agilent Technologies and ATT

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 12.32 times less return on investment than ATT. In addition to that, Agilent Technologies is 1.11 times more volatile than ATT Inc. It trades about 0.0 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.06 per unit of volatility. If you would invest  1,576  in ATT Inc on September 7, 2024 and sell it today you would earn a total of  807.00  from holding ATT Inc or generate 51.21% return on investment over 90 days.

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

Agilent Technologies  vs.  ATT Inc

Agilent Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Agilent Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

ATT Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Agilent Technologies and ATT

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

The idea behind Agilent Technologies and ATT 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.