Correlation Between Agilent Technologies and AIR CHINA

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

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

Diversification Opportunities for Agilent Technologies and AIR CHINA

0.66

Correlation Coefficient

Agilent Technologies  AIR CHINA

Poor diversification

The 3 months correlation between Agilent and AIR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and AIR CHINA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR CHINA LTD 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 AIR CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR CHINA LTD has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and AIR CHINA go up and down completely randomly.

Pair Corralation between Agilent Technologies and AIR CHINA

Assuming the 90 days horizon Agilent Technologies is expected to generate 0.63 times more return on investment than AIR CHINA. However, Agilent Technologies is 1.58 times less risky than AIR CHINA. It trades about 0.0 of its potential returns per unit of risk. AIR CHINA LTD is currently generating about 0.0 per unit of risk. If you would invest  10,954  in Agilent Technologies on April 20, 2025 and sell it today you would lose (1,166) from holding Agilent Technologies or give up 10.64% of portfolio value over 90 days.

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

Agilent Technologies  vs.  AIR CHINA LTD

Agilent Technologies

Risk-Adjusted Performance

Modest

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

AIR CHINA LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AIR CHINA LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AIR CHINA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Agilent Technologies and AIR CHINA

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

The idea behind Agilent Technologies and AIR CHINA LTD 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.