Correlation Between AGILENT TECH and Biogen

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

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

Diversification Opportunities for AGILENT TECH and Biogen

0.68

Correlation Coefficient

AGILENT TECH  Biogen

Poor diversification

The 3 months correlation between AGILENT and Biogen is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AGILENT TECH and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of AGILENT TECH i.e., AGILENT TECH and Biogen go up and down completely randomly.

Pair Corralation between AGILENT TECH and Biogen

Assuming the 90 days trading horizon AGILENT TECH is expected to generate 1.03 times more return on investment than Biogen. However, AGILENT TECH is 1.03 times more volatile than Biogen Inc. It trades about 0.08 of its potential returns per unit of risk. Biogen Inc is currently generating about 0.06 per unit of risk. If you would invest  9,292  in AGILENT TECH on April 25, 2025 and sell it today you would earn a total of  824.00  from holding AGILENT TECH or generate 8.87% 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.  Biogen Inc

AGILENT TECH

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGILENT TECH are ranked lower than 6 (%) 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.

Biogen Inc

Risk-Adjusted Performance

Insignificant

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

Pair Trading with AGILENT TECH and Biogen

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

The idea behind AGILENT TECH and Biogen Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.