Correlation Between Agilent Technologies and Cardinal Health

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

Diversification Opportunities for Agilent Technologies and Cardinal Health

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Agilent and Cardinal is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health 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 Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Cardinal Health go up and down completely randomly.

Pair Corralation between Agilent Technologies and Cardinal Health

Taking into account the 90-day investment horizon Agilent Technologies is expected to under-perform the Cardinal Health. But the stock apears to be less risky and, when comparing its historical volatility, Agilent Technologies is 1.01 times less risky than Cardinal Health. The stock trades about -0.1 of its potential returns per unit of risk. The Cardinal Health is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  6,984  in Cardinal Health on July 1, 2022 and sell it today you would lose (205.00)  from holding Cardinal Health or give up 2.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Agilent Technologies  vs.  Cardinal Health

 Performance (%) 
       Timeline  
Agilent Technologies 
Agilent Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 2 (%) 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.

Agilent Price Channel

Cardinal Health 
Cardinal Performance
21 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Cardinal Health reported solid returns over the last few months and may actually be approaching a breakup point.

Cardinal Price Channel

Agilent Technologies and Cardinal Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilent Technologies and Cardinal Health

The main advantage of trading using opposite Agilent Technologies and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.
Agilent Technologies vs. Amazon Inc
The idea behind Agilent Technologies and Cardinal Health 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.
Cardinal Health vs. Amazon Inc
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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