Correlation Between Agilent Technologies and Vivendi SE

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

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

Diversification Opportunities for Agilent Technologies and Vivendi SE

-0.41

Correlation Coefficient

Agilent Technologies  Vivendi SE

Very good diversification

The 3 months correlation between Agilent and Vivendi is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Vivendi SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SE 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 Vivendi SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SE has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Vivendi SE go up and down completely randomly.

Pair Corralation between Agilent Technologies and Vivendi SE

Assuming the 90 days horizon Agilent Technologies is expected to under-perform the Vivendi SE. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.53 times less risky than Vivendi SE. The stock trades about -0.14 of its potential returns per unit of risk. The Vivendi SE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Vivendi SE on December 23, 2024 and sell it today you would earn a total of  25.00  from holding Vivendi SE or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Agilent Technologies  vs.  Vivendi SE

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 fragile 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.

Vivendi SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vivendi SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Vivendi SE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Agilent Technologies and Vivendi SE

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

The idea behind Agilent Technologies and Vivendi SE 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.