Correlation Between Agilent Technologies and Burning Rock

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

Diversification Opportunities for Agilent Technologies and Burning Rock

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Agilent and Burning is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Burning Rock Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burning Rock Biotech 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 Burning Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burning Rock Biotech has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Burning Rock go up and down completely randomly.

Pair Corralation between Agilent Technologies and Burning Rock

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.32 times more return on investment than Burning Rock. However, Agilent Technologies is 3.12 times less risky than Burning Rock. It trades about 0.04 of its potential returns per unit of risk. Burning Rock Biotech is currently generating about -0.06 per unit of risk. If you would invest  9,531  in Agilent Technologies on April 3, 2022 and sell it today you would earn a total of  2,390  from holding Agilent Technologies or generate 25.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Agilent Technologies  vs.  Burning Rock Biotech

 Performance (%) 
      Timeline 
Agilent Technologies 
Agilent Performance
0 of 100
Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0071
Payout Ratio
0.18
Last Split Factor
1398:1000
Forward Annual Dividend Rate
0.84
Dividend Date
2022-07-27
Ex Dividend Date
2022-07-01
Last Split Date
2014-11-03

Agilent Price Channel

Burning Rock Biotech 
Burning Performance
0 of 100
Over the last 90 days Burning Rock Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Structure and Payout Changes

Last Split Factor
1:3
Last Split Date
2014-08-01

Burning Price Channel

Agilent Technologies and Burning Rock Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Agilent Technologies and Burning Rock

The main advantage of trading using opposite Agilent Technologies and Burning Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Burning Rock 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 Burning Rock will offset losses from the drop in Burning Rock's long position.
The idea behind Agilent Technologies and Burning Rock Biotech 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.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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