Correlation Between Vericel Corp and Agilent Technologies

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

By analyzing existing cross correlation between Vericel Corp Ord and Agilent Technologies, you can compare the effects of market volatilities on Vericel Corp 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 Vericel Corp with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vericel Corp and Agilent Technologies.

Diversification Opportunities for Vericel Corp and Agilent Technologies

0.94

Correlation Coefficient

Vericel Corp  Agilent Technologies

Almost no diversification

The 3 months correlation between Vericel and Agilent is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Vericel Corp 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 Vericel Corp Ord 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 Vericel Corp i.e., Vericel Corp and Agilent Technologies go up and down completely randomly.

Pair Corralation between Vericel Corp and Agilent Technologies

Given the investment horizon of 90 days Vericel Corp Ord is expected to under-perform the Agilent Technologies. In addition to that, Vericel Corp is 1.4 times more volatile than Agilent Technologies. It trades about -0.16 of its total potential returns per unit of risk. Agilent Technologies is currently generating about -0.21 per unit of volatility. If you would invest  14,165  in Agilent Technologies on January 12, 2025 and sell it today you would lose (3,894) from holding Agilent Technologies or give up 27.49% of portfolio value over 90 days.

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

Vericel Corp Ord  vs.  Agilent Technologies

Vericel Corp Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vericel Corp Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Agilent Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Vericel Corp and Agilent Technologies

The main advantage of trading using opposite Vericel Corp and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp 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.

The idea behind Vericel Corp Ord and Agilent Technologies 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 Commodity Directory module to find actively traded commodities issued by global exchanges.