Correlation Between Agilent Technologies and Gelsenwasser

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

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

Diversification Opportunities for Agilent Technologies and Gelsenwasser

-0.09

Correlation Coefficient

Agilent Technologies  Gelsenwasser

Good diversification

The 3 months correlation between Agilent and Gelsenwasser is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser AG 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Gelsenwasser go up and down completely randomly.

Pair Corralation between Agilent Technologies and Gelsenwasser

Assuming the 90 days horizon Agilent Technologies is expected to generate 0.44 times more return on investment than Gelsenwasser. However, Agilent Technologies is 2.27 times less risky than Gelsenwasser. It trades about 0.55 of its potential returns per unit of risk. Gelsenwasser AG is currently generating about 0.14 per unit of risk. If you would invest  12,881  in Agilent Technologies on October 23, 2024 and sell it today you would earn a total of  1,389  from holding Agilent Technologies or generate 10.78% return on investment over 90 days.

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

Agilent Technologies  vs.  Gelsenwasser AG

Agilent Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Agilent Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Gelsenwasser AG

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gelsenwasser AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gelsenwasser is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Agilent Technologies and Gelsenwasser

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

The idea behind Agilent Technologies and Gelsenwasser AG 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.