Correlation Between Agilent Technologies and Eledon Pharmaceuticals

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

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

Diversification Opportunities for Agilent Technologies and Eledon Pharmaceuticals

0.75

Correlation Coefficient

Agilent Technologies  Eledon Pharmaceuticals

Poor diversification

The 3 months correlation between Agilent and Eledon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Eledon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eledon Pharmaceuticals 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 Eledon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eledon Pharmaceuticals has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Eledon Pharmaceuticals go up and down completely randomly.

Pair Corralation between Agilent Technologies and Eledon Pharmaceuticals

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.46 times more return on investment than Eledon Pharmaceuticals. However, Agilent Technologies is 2.2 times less risky than Eledon Pharmaceuticals. It trades about -0.12 of its potential returns per unit of risk. Eledon Pharmaceuticals is currently generating about -0.09 per unit of risk. If you would invest  13,529  in Agilent Technologies on December 27, 2024 and sell it today you would lose (1,635) from holding Agilent Technologies or give up 12.09% 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.  Eledon Pharmaceuticals

Agilent Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Eledon Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eledon Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Agilent Technologies and Eledon Pharmaceuticals

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

The idea behind Agilent Technologies and Eledon Pharmaceuticals 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.