Correlation Between Agilent Technologies and Bristol Myer

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Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Bristol Myer 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 Bristol Myer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Bristol Myer Squi, you can compare the effects of market volatilities on Agilent Technologies and Bristol Myer 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 Bristol Myer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Bristol Myer.

Diversification Opportunities for Agilent Technologies and Bristol Myer

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Agilent and Bristol is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Bristol Myer Squi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristol Myer Squi 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 Bristol Myer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristol Myer Squi has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Bristol Myer go up and down completely randomly.

Pair Corralation between Agilent Technologies and Bristol Myer

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 3.5 times less return on investment than Bristol Myer. But when comparing it to its historical volatility, Agilent Technologies is 4.05 times less risky than Bristol Myer. It trades about 0.05 of its potential returns per unit of risk. Bristol Myer Squi is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  102,368  in Bristol Myer Squi on August 29, 2022 and sell it today you would earn a total of  26,332  from holding Bristol Myer Squi or generate 25.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Agilent Technologies  vs.  Bristol Myer Squi

 Performance (%) 
       Timeline  
Agilent Technologies 
Agilent Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Agilent Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Agilent Price Channel

Bristol Myer Squi 
Bristol Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myer Squi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Bristol Myer displayed solid returns over the last few months and may actually be approaching a breakup point.

Bristol Price Channel

Agilent Technologies and Bristol Myer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilent Technologies and Bristol Myer

The main advantage of trading using opposite Agilent Technologies and Bristol Myer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Bristol Myer 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 Bristol Myer will offset losses from the drop in Bristol Myer's long position.
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The idea behind Agilent Technologies and Bristol Myer Squi 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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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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