Correlation Between Intelligent Bio and Agilent Technologies

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

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

Diversification Opportunities for Intelligent Bio and Agilent Technologies

0.22

Correlation Coefficient

Intelligent Bio  Agilent Technologies

Modest diversification

The 3 months correlation between Intelligent and Agilent is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Bio Solutions and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Intelligent Bio 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 Intelligent Bio Solutions 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 Intelligent Bio i.e., Intelligent Bio and Agilent Technologies go up and down completely randomly.

Pair Corralation between Intelligent Bio and Agilent Technologies

Given the investment horizon of 90 days Intelligent Bio Solutions is expected to under-perform the Agilent Technologies. In addition to that, Intelligent Bio is 3.91 times more volatile than Agilent Technologies. It trades about -0.02 of its total potential returns per unit of risk. Agilent Technologies is currently generating about 0.04 per unit of volatility. If you would invest  13,617  in Agilent Technologies on September 12, 2024 and sell it today you would earn a total of  502.00  from holding Agilent Technologies or generate 3.69% return on investment over 90 days.

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

Intelligent Bio Solutions  vs.  Agilent Technologies

Intelligent Bio Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Bio Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Agilent Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Intelligent Bio and Agilent Technologies

The main advantage of trading using opposite Intelligent Bio and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelligent Bio 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 Intelligent Bio Solutions 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.