Correlation Between AGILENT TECH and Chevron

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Can any of the company-specific risk be diversified away by investing in both AGILENT TECH and Chevron 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 TECH and Chevron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGILENT TECH and Chevron, you can compare the effects of market volatilities on AGILENT TECH and Chevron 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 TECH with a short position of Chevron. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGILENT TECH and Chevron.

Diversification Opportunities for AGILENT TECH and Chevron

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between AGILENT and Chevron is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AGILENT TECH and Chevron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron and AGILENT TECH 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 TECH are associated (or correlated) with Chevron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron has no effect on the direction of AGILENT TECH i.e., AGILENT TECH and Chevron go up and down completely randomly.

Pair Corralation between AGILENT TECH and Chevron

Assuming the 90 days trading horizon AGILENT TECH is expected to generate 1.4 times more return on investment than Chevron. However, AGILENT TECH is 1.4 times more volatile than Chevron. It trades about 0.06 of its potential returns per unit of risk. Chevron is currently generating about 0.08 per unit of risk. If you would invest  9,340  in AGILENT TECH on April 24, 2025 and sell it today you would earn a total of  563.00  from holding AGILENT TECH or generate 6.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

AGILENT TECH  vs.  Chevron

 Performance 
       Timeline  
AGILENT TECH 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AGILENT TECH are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AGILENT TECH may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Chevron 

Risk-Adjusted Performance

Modest

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

AGILENT TECH and Chevron Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AGILENT TECH and Chevron

The main advantage of trading using opposite AGILENT TECH and Chevron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGILENT TECH position performs unexpectedly, Chevron 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 Chevron will offset losses from the drop in Chevron's long position.
The idea behind AGILENT TECH and Chevron 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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