Correlation Between Agilent Technologies and TruBridge

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

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

Diversification Opportunities for Agilent Technologies and TruBridge

-0.45

Correlation Coefficient

Agilent Technologies  TruBridge

Very good diversification

The 3 months correlation between Agilent and TruBridge is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and TruBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TruBridge 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 TruBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TruBridge has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and TruBridge go up and down completely randomly.

Pair Corralation between Agilent Technologies and TruBridge

Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the TruBridge. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.66 times less risky than TruBridge. The stock trades about -0.13 of its potential returns per unit of risk. The TruBridge is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,932  in TruBridge on December 28, 2024 and sell it today you would earn a total of  879.00  from holding TruBridge or generate 45.5% return on investment over 90 days.

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

Agilent Technologies  vs.  TruBridge

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TruBridge

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TruBridge are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, TruBridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agilent Technologies and TruBridge

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

The idea behind Agilent Technologies and TruBridge 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.