Correlation Between Agilent Technologies and JPMorgan Japanese

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

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

Diversification Opportunities for Agilent Technologies and JPMorgan Japanese

0.37

Correlation Coefficient

Agilent Technologies  JPMorgan Japanese

Weak diversification

The 3 months correlation between Agilent and JPMorgan is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and JPMorgan Japanese Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Japanese 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 JPMorgan Japanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Japanese has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and JPMorgan Japanese go up and down completely randomly.

Pair Corralation between Agilent Technologies and JPMorgan Japanese

Assuming the 90 days trading horizon Agilent Technologies is expected to under-perform the JPMorgan Japanese. In addition to that, Agilent Technologies is 1.49 times more volatile than JPMorgan Japanese Investment. It trades about -0.01 of its total potential returns per unit of risk. JPMorgan Japanese Investment is currently generating about 0.06 per unit of volatility. If you would invest  51,276  in JPMorgan Japanese Investment on October 9, 2024 and sell it today you would earn a total of  5,024  from holding JPMorgan Japanese Investment or generate 9.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.4%
Values	Daily Returns

Agilent Technologies  vs.  JPMorgan Japanese Investment

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

JPMorgan Japanese

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Japanese Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, JPMorgan Japanese is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Agilent Technologies and JPMorgan Japanese

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

The idea behind Agilent Technologies and JPMorgan Japanese Investment 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.