Correlation Between Agilent Technologies and Ginkgo Bioworks

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

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

Diversification Opportunities for Agilent Technologies and Ginkgo Bioworks

-0.37

Correlation Coefficient

Agilent Technologies  Ginkgo Bioworks

Very good diversification

The 3 months correlation between Agilent and Ginkgo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Ginkgo Bioworks Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginkgo Bioworks Holdings 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 Ginkgo Bioworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginkgo Bioworks Holdings has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Ginkgo Bioworks go up and down completely randomly.

Pair Corralation between Agilent Technologies and Ginkgo Bioworks

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 0.29 times more return on investment than Ginkgo Bioworks. However, Agilent Technologies is 3.46 times less risky than Ginkgo Bioworks. It trades about 0.01 of its potential returns per unit of risk. Ginkgo Bioworks Holdings is currently generating about -0.06 per unit of risk. If you would invest  13,645  in Agilent Technologies on July 22, 2024 and sell it today you would earn a total of  238.00  from holding Agilent Technologies or generate 1.74% return on investment over 90 days.

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

Agilent Technologies  vs.  Ginkgo Bioworks Holdings

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.

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ginkgo Bioworks Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Agilent Technologies and Ginkgo Bioworks

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

The idea behind Agilent Technologies and Ginkgo Bioworks Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.