Correlation Between Agilent Technologies and Lennar Corp

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

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

Diversification Opportunities for Agilent Technologies and Lennar Corp

0.29

Correlation Coefficient

Agilent Technologies  Lennar Corp

Modest diversification

The 3 months correlation between Agilent and Lennar is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Lennar Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar Corp Cl 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 Lennar Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar Corp Cl has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Lennar Corp go up and down completely randomly.

Pair Corralation between Agilent Technologies and Lennar Corp

Assuming the 90 days trading horizon Agilent Technologies is expected to generate 0.76 times more return on investment than Lennar Corp. However, Agilent Technologies is 1.31 times less risky than Lennar Corp. It trades about -0.05 of its potential returns per unit of risk. Lennar Corp Cl is currently generating about -0.56 per unit of risk. If you would invest  13,770  in Agilent Technologies on October 6, 2024 and sell it today you would lose (201.00) from holding Agilent Technologies or give up 1.46% of portfolio value over 90 days.

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

Agilent Technologies  vs.  Lennar Corp Cl

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. In spite of comparatively stable basic indicators, Agilent Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Lennar Corp Cl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lennar Corp Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Agilent Technologies and Lennar Corp

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

The idea behind Agilent Technologies and Lennar Corp Cl 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.