Correlation Between Agilent Technologies and Adaptimmune Therapeutics

Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Adaptimmune Therapeutics 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 Adaptimmune Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agilent Technologies and Adaptimmune Therapeutics Plc, you can compare the effects of market volatilities on Agilent Technologies and Adaptimmune Therapeutics 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 Adaptimmune Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Adaptimmune Therapeutics.

Diversification Opportunities for Agilent Technologies and Adaptimmune Therapeutics

-0.41

Correlation Coefficient

Agilent Technologies  Adaptimmune Therapeutics

Very good diversification

The 3 months correlation between Agilent and Adaptimmune is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Adaptimmune Therapeutics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptimmune Therapeutics 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 Adaptimmune Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptimmune Therapeutics has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Adaptimmune Therapeutics go up and down completely randomly.

Pair Corralation between Agilent Technologies and Adaptimmune Therapeutics

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 2.13 times less return on investment than Adaptimmune Therapeutics. But when comparing it to its historical volatility, Agilent Technologies is 3.16 times less risky than Adaptimmune Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Adaptimmune Therapeutics Plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  142.00  in Adaptimmune Therapeutics Plc on July 21, 2024 and sell it today you would lose (58.00) from holding Adaptimmune Therapeutics Plc or give up 40.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Agilent Technologies  vs.  Adaptimmune Therapeutics Plc

Agilent Technologies

Risk-Adjusted Performance

4 of 100

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

Adaptimmune Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adaptimmune Therapeutics Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Agilent Technologies and Adaptimmune Therapeutics

The main advantage of trading using opposite Agilent Technologies and Adaptimmune Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Adaptimmune Therapeutics 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 Adaptimmune Therapeutics will offset losses from the drop in Adaptimmune Therapeutics' long position.

The idea behind Agilent Technologies and Adaptimmune Therapeutics Plc 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..