Correlation Between OSB GROUP and Agilent Technologies

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

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

Diversification Opportunities for OSB GROUP and Agilent Technologies

0.58

Correlation Coefficient

OSB GROUP  Agilent Technologies

Very weak diversification

The 3 months correlation between OSB and Agilent is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding OSB GROUP PLC and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and OSB GROUP 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 OSB GROUP PLC 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 OSB GROUP i.e., OSB GROUP and Agilent Technologies go up and down completely randomly.

Pair Corralation between OSB GROUP and Agilent Technologies

Assuming the 90 days horizon OSB GROUP PLC is expected to generate 1.6 times more return on investment than Agilent Technologies. However, OSB GROUP is 1.6 times more volatile than Agilent Technologies. It trades about 0.07 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.06 per unit of risk. If you would invest  448.00  in OSB GROUP PLC on October 11, 2024 and sell it today you would earn a total of  22.00  from holding OSB GROUP PLC or generate 4.91% return on investment over 90 days.

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

OSB GROUP PLC  vs.  Agilent Technologies

OSB GROUP PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OSB GROUP PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, OSB GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Agilent Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Agilent Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with OSB GROUP and Agilent Technologies

The main advantage of trading using opposite OSB GROUP and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSB GROUP 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 OSB GROUP PLC 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.