Correlation Between Agilent Technologies and Bankers Investment

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

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

Diversification Opportunities for Agilent Technologies and Bankers Investment

0.36

Correlation Coefficient

Agilent Technologies  Bankers Investment

Weak diversification

The 3 months correlation between Agilent and Bankers is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Bankers Investment go up and down completely randomly.

Pair Corralation between Agilent Technologies and Bankers Investment

Assuming the 90 days trading horizon Agilent Technologies is expected to generate 1.68 times more return on investment than Bankers Investment. However, Agilent Technologies is 1.68 times more volatile than Bankers Investment Trust. It trades about 0.44 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.4 per unit of risk. If you would invest  13,387  in Agilent Technologies on October 24, 2024 and sell it today you would earn a total of  1,910  from holding Agilent Technologies or generate 14.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Agilent Technologies  vs.  Bankers Investment Trust

Agilent Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Agilent Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bankers Investment Trust

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bankers Investment Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bankers Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Agilent Technologies and Bankers Investment

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

The idea behind Agilent Technologies and Bankers Investment Trust 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.