Correlation Between Agilent Technologies and Microchip Technology

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

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

Diversification Opportunities for Agilent Technologies and Microchip Technology

0.89

Correlation Coefficient

Agilent Technologies  Microchip Technology

Very poor diversification

The 3 months correlation between Agilent and Microchip is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Microchip Technology Incorpora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microchip Technology 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 Microchip Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microchip Technology has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Microchip Technology go up and down completely randomly.

Pair Corralation between Agilent Technologies and Microchip Technology

Assuming the 90 days trading horizon Agilent Technologies is expected to under-perform the Microchip Technology. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.71 times less risky than Microchip Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Microchip Technology Incorporated is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  17,200  in Microchip Technology Incorporated on April 23, 2025 and sell it today you would earn a total of  3,611  from holding Microchip Technology Incorporated or generate 20.99% return on investment over 90 days.

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

Agilent Technologies  vs.  Microchip Technology Incorpora

Agilent Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Agilent Technologies may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Microchip Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microchip Technology Incorporated are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Microchip Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agilent Technologies and Microchip Technology

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

The idea behind Agilent Technologies and Microchip Technology Incorporated 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.