Correlation Between Agilent Technologies and Velodyne Lidar

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

Diversification Opportunities for Agilent Technologies and Velodyne Lidar

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Agilent and Velodyne is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Velodyne Lidar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Velodyne Lidar 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 Velodyne Lidar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Velodyne Lidar has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Velodyne Lidar go up and down completely randomly.

Pair Corralation between Agilent Technologies and Velodyne Lidar

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.3 times more return on investment than Velodyne Lidar. However, Agilent Technologies is 3.31 times less risky than Velodyne Lidar. It trades about 0.03 of its potential returns per unit of risk. Velodyne Lidar is currently generating about -0.07 per unit of risk. If you would invest  10,206  in Agilent Technologies on June 27, 2022 and sell it today you would earn a total of  2,142  from holding Agilent Technologies or generate 20.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Agilent Technologies  vs.  Velodyne Lidar

 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 new stock price disturbance, may contribute to short-term losses for the investors.

Agilent Price Channel

Velodyne Lidar 
Velodyne Performance
0 of 100
Over the last 90 days Velodyne Lidar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Velodyne Lidar is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Velodyne Price Channel

Agilent Technologies and Velodyne Lidar Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilent Technologies and Velodyne Lidar

The main advantage of trading using opposite Agilent Technologies and Velodyne Lidar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Velodyne Lidar 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 Velodyne Lidar will offset losses from the drop in Velodyne Lidar's long position.
Agilent Technologies vs. Sigma Lithium Corp
The idea behind Agilent Technologies and Velodyne Lidar 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.
Velodyne Lidar vs. Industrias Bachoco SA
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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