Correlation Between Agilent Technologies and Compugen

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

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

Diversification Opportunities for Agilent Technologies and Compugen

0.61

Correlation Coefficient

Agilent Technologies  Compugen

Poor diversification

The 3 months correlation between Agilent and Compugen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Compugen go up and down completely randomly.

Pair Corralation between Agilent Technologies and Compugen

Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Compugen. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 3.12 times less risky than Compugen. The stock trades about -0.27 of its potential returns per unit of risk. The Compugen is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Compugen on October 9, 2024 and sell it today you would lose (3.00) from holding Compugen or give up 1.84% of portfolio value over 90 days.

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

Agilent Technologies  vs.  Compugen

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. Despite somewhat strong basic indicators, Agilent Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Compugen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compugen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Compugen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Agilent Technologies and Compugen

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

The idea behind Agilent Technologies and Compugen 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.