Correlation Between Agilent Technologies and Uber Technologies

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Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Uber Technologies 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 Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Uber Technologies, you can compare the effects of market volatilities on Agilent Technologies and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Uber Technologies.

Diversification Opportunities for Agilent Technologies and Uber Technologies

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Agilent and Uber Technologies is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Uber Technologies go up and down completely randomly.

Pair Corralation between Agilent Technologies and Uber Technologies

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.56 times more return on investment than Uber Technologies. However, Agilent Technologies is 1.78 times less risky than Uber Technologies. It trades about 0.01 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.13 per unit of risk. If you would invest  13,016  in Agilent Technologies on February 27, 2022 and sell it today you would earn a total of  39.00  from holding Agilent Technologies or generate 0.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Agilent Technologies  vs.  Uber Technologies

 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 somewhat strong basic indicators, Agilent Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Agilent Price Channel

Uber Technologies 
Uber Technologies Performance
0 of 100
Over the last 90 days Uber Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in June 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Uber Technologies Price Channel

Agilent Technologies and Uber Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Agilent Technologies and Uber Technologies

The main advantage of trading using opposite Agilent Technologies and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.
The idea behind Agilent Technologies and Uber Technologies 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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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