Correlation Between Agilent Technologies and Tatton Asset

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

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

Diversification Opportunities for Agilent Technologies and Tatton Asset

-0.64

Correlation Coefficient

Agilent Technologies  Tatton Asset

Excellent diversification

The 3 months correlation between Agilent and Tatton is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Tatton Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatton Asset Management 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 Tatton Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatton Asset Management has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Tatton Asset go up and down completely randomly.

Pair Corralation between Agilent Technologies and Tatton Asset

Assuming the 90 days trading horizon Agilent Technologies is expected to under-perform the Tatton Asset. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.37 times less risky than Tatton Asset. The stock trades about -0.18 of its potential returns per unit of risk. The Tatton Asset Management is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  69,400  in Tatton Asset Management on October 9, 2024 and sell it today you would lose (1,000.00) from holding Tatton Asset Management or give up 1.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Agilent Technologies  vs.  Tatton Asset Management

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.

Tatton Asset Management

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tatton Asset Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Tatton Asset may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Agilent Technologies and Tatton Asset

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

The idea behind Agilent Technologies and Tatton Asset Management 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.