Correlation Between Agilent Technologies and BlackRock

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

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

Diversification Opportunities for Agilent Technologies and BlackRock

0.12

Correlation Coefficient

Agilent Technologies  BlackRock

Average diversification

The 3 months correlation between Agilent and BlackRock is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock 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 BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and BlackRock go up and down completely randomly.

Pair Corralation between Agilent Technologies and BlackRock

Assuming the 90 days trading horizon Agilent Technologies is expected to generate 2.16 times less return on investment than BlackRock. But when comparing it to its historical volatility, Agilent Technologies is 1.06 times less risky than BlackRock. It trades about 0.11 of its potential returns per unit of risk. BlackRock is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  6,645  in BlackRock on September 27, 2024 and sell it today you would earn a total of  3,183  from holding BlackRock or generate 47.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Agilent Technologies  vs.  BlackRock

Agilent Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

BlackRock

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BlackRock sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agilent Technologies and BlackRock

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

The idea behind Agilent Technologies and BlackRock 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 Stocks Directory module to find actively traded stocks across global markets.