Correlation Between AGILENT TECH and Great Portland

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

By analyzing existing cross correlation between AGILENT TECH and Great Portland Estates, you can compare the effects of market volatilities on AGILENT TECH and Great Portland 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 Great Portland. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGILENT TECH and Great Portland.

Diversification Opportunities for AGILENT TECH and Great Portland

0.71

Correlation Coefficient

AGILENT TECH  Great Portland

Poor diversification

The 3 months correlation between AGILENT and Great is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AGILENT TECH and Great Portland Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Portland Estates 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 Great Portland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Portland Estates has no effect on the direction of AGILENT TECH i.e., AGILENT TECH and Great Portland go up and down completely randomly.

Pair Corralation between AGILENT TECH and Great Portland

Assuming the 90 days trading horizon AGILENT TECH is expected to generate 2.07 times less return on investment than Great Portland. But when comparing it to its historical volatility, AGILENT TECH is 1.09 times less risky than Great Portland. It trades about 0.06 of its potential returns per unit of risk. Great Portland Estates is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  349.00  in Great Portland Estates on April 24, 2025 and sell it today you would earn a total of  49.00  from holding Great Portland Estates or generate 14.04% return on investment over 90 days.

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

AGILENT TECH  vs.  Great Portland Estates

AGILENT TECH

Risk-Adjusted Performance

Modest

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.

Great Portland Estates

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Great Portland Estates are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, Great Portland reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGILENT TECH and Great Portland

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

The idea behind AGILENT TECH and Great Portland Estates 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.