Correlation Between Agilent Technologies and Zymeworks Common

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

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

Diversification Opportunities for Agilent Technologies and Zymeworks Common

-0.44

Correlation Coefficient

Agilent Technologies  Zymeworks Common

Very good diversification

The 3 months correlation between Agilent and Zymeworks is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Zymeworks Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zymeworks Common Stock 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 Zymeworks Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zymeworks Common Stock has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Zymeworks Common go up and down completely randomly.

Pair Corralation between Agilent Technologies and Zymeworks Common

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 12.5 times less return on investment than Zymeworks Common. But when comparing it to its historical volatility, Agilent Technologies is 1.79 times less risky than Zymeworks Common. It trades about 0.02 of its potential returns per unit of risk. Zymeworks Common Stock is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,159  in Zymeworks Common Stock on September 4, 2024 and sell it today you would earn a total of  291.00  from holding Zymeworks Common Stock or generate 25.11% 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.  Zymeworks Common Stock

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 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.

Zymeworks Common Stock

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zymeworks Common Stock are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Zymeworks Common exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agilent Technologies and Zymeworks Common

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

The idea behind Agilent Technologies and Zymeworks Common Stock 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..