Correlation Between Agilent Technologies and Twitter

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

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

Diversification Opportunities for Agilent Technologies and Twitter

-0.28
  Correlation Coefficient
Agilent Technologies
Twitter

Very good diversification

The 3 months correlation between Agilent and Twitter is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Twitter in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Twitter 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 Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Twitter go up and down completely randomly.

Pair Corralation between Agilent Technologies and Twitter

Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Twitter. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.86 times less risky than Twitter. The stock trades about -0.17 of its potential returns per unit of risk. The Twitter is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,343  in Twitter on July 28, 2021 and sell it today you would lose (160.00)  from holding Twitter or give up 2.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Agilent Technologies  vs.  Twitter

 Performance (%) 
      Timeline 
Agilent Technologies 
 Agilent Performance
4 of 100
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 current stock price disturbance, may contribute to short-term losses for the investors.

Agilent Price Channel

Twitter 
 Twitter Performance
0 of 100
Over the last 90 days Twitter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Twitter Price Channel

Agilent Technologies and Twitter Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Agilent Technologies and Twitter

The main advantage of trading using opposite Agilent Technologies and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.
The idea behind Agilent Technologies and Twitter 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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