Correlation Between Agilent Technologies and Evotec SE
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Evotec SE 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 Evotec SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Evotec SE ADR, you can compare the effects of market volatilities on Agilent Technologies and Evotec SE 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 Evotec SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Evotec SE.
Diversification Opportunities for Agilent Technologies and Evotec SE
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilent and Evotec is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Evotec SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evotec SE ADR 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 Evotec SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evotec SE ADR has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Evotec SE go up and down completely randomly.
Pair Corralation between Agilent Technologies and Evotec SE
Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.54 times more return on investment than Evotec SE. However, Agilent Technologies is 1.84 times less risky than Evotec SE. It trades about -0.11 of its potential returns per unit of risk. Evotec SE ADR is currently generating about -0.14 per unit of risk. If you would invest 13,529 in Agilent Technologies on December 27, 2024 and sell it today you would lose (1,539) from holding Agilent Technologies or give up 11.38% 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. Evotec SE ADR
Performance |
Timeline |
Agilent Technologies |
Evotec SE ADR |
Agilent Technologies and Evotec SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Agilent Technologies and Evotec SE
The main advantage of trading using opposite Agilent Technologies and Evotec SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Evotec SE 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 Evotec SE will offset losses from the drop in Evotec SE's long position.Agilent Technologies vs. Danaher | Agilent Technologies vs. Illumina | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Waters |
Evotec SE vs. Prestige Brand Holdings | Evotec SE vs. Supernus Pharmaceuticals | Evotec SE vs. Collegium Pharmaceutical | Evotec SE vs. ANI Pharmaceuticals |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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