Correlation Between Agilent Technologies and CASIO COMPUTER

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

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

Diversification Opportunities for Agilent Technologies and CASIO COMPUTER

0.11

Correlation Coefficient

Agilent Technologies  CASIO COMPUTER

Average diversification

The 3 months correlation between Agilent and CASIO is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and CASIO PUTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CASIO COMPUTER 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 CASIO COMPUTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CASIO COMPUTER has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and CASIO COMPUTER go up and down completely randomly.

Pair Corralation between Agilent Technologies and CASIO COMPUTER

Assuming the 90 days horizon Agilent Technologies is expected to under-perform the CASIO COMPUTER. In addition to that, Agilent Technologies is 1.63 times more volatile than CASIO PUTER. It trades about -0.14 of its total potential returns per unit of risk. CASIO PUTER is currently generating about -0.08 per unit of volatility. If you would invest  790.00  in CASIO PUTER on December 21, 2024 and sell it today you would lose (39.00) from holding CASIO PUTER or give up 4.94% of portfolio value over 90 days.

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

Agilent Technologies  vs.  CASIO PUTER

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CASIO COMPUTER

Risk-Adjusted Performance

Very Weak

Over the last 90 days CASIO PUTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CASIO COMPUTER is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Agilent Technologies and CASIO COMPUTER

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

The idea behind Agilent Technologies and CASIO PUTER 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.