Correlation Between Agilent Technologies and Sana Biotechnology

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

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

Diversification Opportunities for Agilent Technologies and Sana Biotechnology

0.53

Correlation Coefficient

Agilent Technologies  Sana Biotechnology

Very weak diversification

The 3 months correlation between Agilent and Sana is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology and Agilent Technologies 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 Technologies are associated (or correlated) with Sana Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sana Biotechnology has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Sana Biotechnology go up and down completely randomly.

Pair Corralation between Agilent Technologies and Sana Biotechnology

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.34 times more return on investment than Sana Biotechnology. However, Agilent Technologies is 2.92 times less risky than Sana Biotechnology. It trades about 0.0 of its potential returns per unit of risk. Sana Biotechnology is currently generating about -0.21 per unit of risk. If you would invest  13,874  in Agilent Technologies on September 2, 2024 and sell it today you would lose (77.00) from holding Agilent Technologies or give up 0.55% of portfolio value over 90 days.

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

Agilent Technologies  vs.  Sana Biotechnology

Agilent Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Agilent Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sana Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sana Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Agilent Technologies and Sana Biotechnology

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

The idea behind Agilent Technologies and Sana Biotechnology 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.