Correlation Between Agilent Technologies and I Mab

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

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

Diversification Opportunities for Agilent Technologies and I Mab

0.1

Correlation Coefficient

Agilent Technologies  I Mab

Average diversification

The 3 months correlation between Agilent and IMAB is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and I Mab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Mab 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 I Mab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Mab has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and I Mab go up and down completely randomly.

Pair Corralation between Agilent Technologies and I Mab

Taking into account the 90-day investment horizon Agilent Technologies is expected to generate 1.4 times less return on investment than I Mab. But when comparing it to its historical volatility, Agilent Technologies is 2.86 times less risky than I Mab. It trades about 0.08 of its potential returns per unit of risk. I Mab is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  122.00  in I Mab on July 23, 2024 and sell it today you would earn a total of  26.00  from holding I Mab or generate 21.31% return on investment over 90 days.

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

Agilent Technologies  vs.  I Mab

Agilent Technologies

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Agilent Technologies may actually be approaching a critical reversion point that can send shares even higher in November 2024.

I Mab

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in I Mab are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, I Mab may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Agilent Technologies and I Mab

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

The idea behind Agilent Technologies and I Mab 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 Global Correlations module to find global opportunities by holding instruments from different markets.