Correlation Between Integra LifeSciences and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Integra LifeSciences and Agilent Technologies 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 Integra LifeSciences and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra LifeSciences Holdings and Agilent Technologies, you can compare the effects of market volatilities on Integra LifeSciences and Agilent Technologies 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 Integra LifeSciences with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra LifeSciences and Agilent Technologies.
Diversification Opportunities for Integra LifeSciences and Agilent Technologies
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Integra and Agilent is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Integra LifeSciences 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 Integra LifeSciences Holdings are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Integra LifeSciences i.e., Integra LifeSciences and Agilent Technologies go up and down completely randomly.
Pair Corralation between Integra LifeSciences and Agilent Technologies
Given the investment horizon of 90 days Integra LifeSciences Holdings is expected to under-perform the Agilent Technologies. In addition to that, Integra LifeSciences is 1.4 times more volatile than Agilent Technologies. It trades about -0.3 of its total potential returns per unit of risk. Agilent Technologies is currently generating about -0.11 per unit of volatility. If you would invest 14,373 in Agilent Technologies on February 3, 2024 and sell it today you would lose (621.00) from holding Agilent Technologies or give up 4.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Integra LifeSciences Holdings vs. Agilent Technologies
Performance |
Timeline |
Integra LifeSciences |
Agilent Technologies |
Integra LifeSciences and Agilent Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Integra LifeSciences and Agilent Technologies
The main advantage of trading using opposite Integra LifeSciences and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra LifeSciences position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.Integra LifeSciences vs. ICU Medical | Integra LifeSciences vs. CONMED | Integra LifeSciences vs. Haemonetics | Integra LifeSciences vs. Merit Medical Systems |
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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 the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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