Correlation Between Air Lease and Agilent Technologies

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

By analyzing existing cross correlation between Air Lease and Agilent Technologies, you can compare the effects of market volatilities on Air Lease and Agilent Technologies 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 Air Lease with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Agilent Technologies.

Diversification Opportunities for Air Lease and Agilent Technologies

0.78

Correlation Coefficient

Air Lease  Agilent Technologies

Poor diversification

The 3 months correlation between Air and Agilent is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Air Lease 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 Air Lease are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Air Lease i.e., Air Lease and Agilent Technologies go up and down completely randomly.

Pair Corralation between Air Lease and Agilent Technologies

Assuming the 90 days trading horizon Air Lease is expected to generate 0.88 times more return on investment than Agilent Technologies. However, Air Lease is 1.13 times less risky than Agilent Technologies. It trades about 0.19 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.06 per unit of risk. If you would invest  3,965  in Air Lease on April 24, 2025 and sell it today you would earn a total of  875.00  from holding Air Lease or generate 22.07% return on investment over 90 days.

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

Air Lease  vs.  Agilent Technologies

Air Lease

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Air Lease reported solid returns over the last few months and may actually be approaching a breakup point.

Agilent Technologies

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Air Lease and Agilent Technologies

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

The idea behind Air Lease and Agilent Technologies 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .