Correlation Between Agilent Technologies and Fulgent Genetics

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

Diversification Opportunities for Agilent Technologies and Fulgent Genetics

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Agilent and Fulgent is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Fulgent Genetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Genetics 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 Fulgent Genetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Genetics has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Fulgent Genetics go up and down completely randomly.

Pair Corralation between Agilent Technologies and Fulgent Genetics

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.64 times more return on investment than Fulgent Genetics. However, Agilent Technologies is 1.56 times less risky than Fulgent Genetics. It trades about 0.23 of its potential returns per unit of risk. Fulgent Genetics is currently generating about -0.17 per unit of risk. If you would invest  13,701  in Agilent Technologies on December 30, 2023 and sell it today you would earn a total of  850.00  from holding Agilent Technologies or generate 6.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Agilent Technologies  vs.  Fulgent Genetics

 Performance 
       Timeline  
Agilent Technologies 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 4 (%) 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 recent stock price disturbance, may contribute to short-term losses for the investors.
Fulgent Genetics 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Fulgent Genetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Agilent Technologies and Fulgent Genetics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilent Technologies and Fulgent Genetics

The main advantage of trading using opposite Agilent Technologies and Fulgent Genetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Fulgent Genetics 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 Fulgent Genetics will offset losses from the drop in Fulgent Genetics' long position.
The idea behind Agilent Technologies and Fulgent Genetics 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 the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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