Correlation Between 2x Corn and Agilent Technologies

Can any of the company-specific risk be diversified away by investing in both 2x Corn and Agilent Technologies 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 2x Corn and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 2x Corn ETF and Agilent Technologies, you can compare the effects of market volatilities on 2x Corn and Agilent Technologies 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 2x Corn with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2x Corn and Agilent Technologies.

Diversification Opportunities for 2x Corn and Agilent Technologies

0.51

Correlation Coefficient

2x Corn  Agilent Technologies

Very weak diversification

The 3 months correlation between CORX and Agilent is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding 2x Corn ETF and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and 2x Corn 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 2x Corn ETF are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of 2x Corn i.e., 2x Corn and Agilent Technologies go up and down completely randomly.

Pair Corralation between 2x Corn and Agilent Technologies

Given the investment horizon of 90 days 2x Corn ETF is expected to under-perform the Agilent Technologies. In addition to that, 2x Corn is 2.32 times more volatile than Agilent Technologies. It trades about -0.24 of its total potential returns per unit of risk. Agilent Technologies is currently generating about -0.56 per unit of volatility. If you would invest  14,863  in Agilent Technologies on December 4, 2024 and sell it today you would lose (2,503) from holding Agilent Technologies or give up 16.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

2x Corn ETF  vs.  Agilent Technologies

2x Corn ETF

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 2x Corn ETF are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, 2x Corn may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with 2x Corn and Agilent Technologies

The main advantage of trading using opposite 2x Corn and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2x Corn position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.

The idea behind 2x Corn ETF and Agilent Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.