Correlation Between ICU Medical and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both ICU Medical 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 ICU Medical and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Agilent Technologies, you can compare the effects of market volatilities on ICU Medical 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 ICU Medical with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Agilent Technologies.
Diversification Opportunities for ICU Medical and Agilent Technologies
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ICU and Agilent is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and ICU Medical 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 ICU Medical 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 ICU Medical i.e., ICU Medical and Agilent Technologies go up and down completely randomly.
Pair Corralation between ICU Medical and Agilent Technologies
Given the investment horizon of 90 days ICU Medical is expected to under-perform the Agilent Technologies. In addition to that, ICU Medical is 1.13 times more volatile than Agilent Technologies. It trades about -0.19 of its total potential returns per unit of risk. Agilent Technologies is currently generating about -0.11 per unit of volatility. If you would invest 14,556 in Agilent Technologies on January 31, 2024 and sell it today you would lose (597.00) from holding Agilent Technologies or give up 4.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ICU Medical vs. Agilent Technologies
Performance |
Timeline |
ICU Medical |
Agilent Technologies |
ICU Medical and Agilent Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICU Medical and Agilent Technologies
The main advantage of trading using opposite ICU Medical and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical 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.ICU Medical vs. Novo Integrated Sciences | ICU Medical vs. HCA Holdings | ICU Medical vs. Acadia Healthcare | ICU Medical vs. Pennant Group |
Agilent Technologies vs. Tandem Diabetes Care | Agilent Technologies vs. Inspire Medical Systems | Agilent Technologies vs. Shockwave Medical | Agilent Technologies vs. Penumbra |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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