Correlation Between AC Immune and Agilent Technologies

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

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

Diversification Opportunities for AC Immune and Agilent Technologies

0.03

Correlation Coefficient

AC Immune  Agilent Technologies

Significant diversification

The 3 months correlation between ACIU and Agilent is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding AC Immune and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and AC Immune 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 AC Immune are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of AC Immune i.e., AC Immune and Agilent Technologies go up and down completely randomly.

Pair Corralation between AC Immune and Agilent Technologies

Given the investment horizon of 90 days AC Immune is expected to generate 2.96 times more return on investment than Agilent Technologies. However, AC Immune is 2.96 times more volatile than Agilent Technologies. It trades about 0.01 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.02 per unit of risk. If you would invest  333.00  in AC Immune on January 26, 2024 and sell it today you would lose (96.00) from holding AC Immune or give up 28.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

AC Immune  vs.  Agilent Technologies

AC Immune

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AC Immune has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Agilent Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AC Immune and Agilent Technologies

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

The idea behind AC Immune and Agilent 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 the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.