Correlation Between Agilent Technologies and Beyond Meat

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

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

Diversification Opportunities for Agilent Technologies and Beyond Meat

-0.18

Correlation Coefficient

Agilent Technologies  Beyond Meat

Good diversification

The 3 months correlation between Agilent and Beyond is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Beyond Meat go up and down completely randomly.

Pair Corralation between Agilent Technologies and Beyond Meat

Assuming the 90 days trading horizon Agilent Technologies is expected to generate 0.38 times more return on investment than Beyond Meat. However, Agilent Technologies is 2.62 times less risky than Beyond Meat. It trades about 0.08 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.02 per unit of risk. If you would invest  28,674  in Agilent Technologies on October 3, 2024 and sell it today you would earn a total of  13,082  from holding Agilent Technologies or generate 45.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.99%
Values	Daily Returns

Agilent Technologies  vs.  Beyond Meat

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 technical and fundamental indicators, Agilent Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Beyond Meat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Meat 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Agilent Technologies and Beyond Meat

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

The idea behind Agilent Technologies and Beyond Meat 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.