Correlation Between C4 TherapeuticsInc and Agilent Technologies

Can any of the company-specific risk be diversified away by investing in both C4 TherapeuticsInc 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 C4 TherapeuticsInc and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C4 TherapeuticsInc and Agilent Technologies, you can compare the effects of market volatilities on C4 TherapeuticsInc 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 C4 TherapeuticsInc with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of C4 TherapeuticsInc and Agilent Technologies.

Diversification Opportunities for C4 TherapeuticsInc and Agilent Technologies

0.55

Correlation Coefficient

C4 TherapeuticsInc  Agilent Technologies

Very weak diversification

The 3 months correlation between CCCC and Agilent is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding C4 TherapeuticsInc and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and C4 TherapeuticsInc 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 C4 TherapeuticsInc 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 C4 TherapeuticsInc i.e., C4 TherapeuticsInc and Agilent Technologies go up and down completely randomly.

Pair Corralation between C4 TherapeuticsInc and Agilent Technologies

Given the investment horizon of 90 days C4 TherapeuticsInc is expected to under-perform the Agilent Technologies. In addition to that, C4 TherapeuticsInc is 1.82 times more volatile than Agilent Technologies. It trades about -0.22 of its total potential returns per unit of risk. Agilent Technologies is currently generating about -0.12 per unit of volatility. If you would invest  14,417  in Agilent Technologies on February 2, 2024 and sell it today you would lose (696.00) from holding Agilent Technologies or give up 4.83% of portfolio value over 90 days.

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

C4 TherapeuticsInc  vs.  Agilent Technologies

C4 TherapeuticsInc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in C4 TherapeuticsInc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, C4 TherapeuticsInc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Agilent Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 3 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with C4 TherapeuticsInc and Agilent Technologies

The main advantage of trading using opposite C4 TherapeuticsInc and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C4 TherapeuticsInc 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 C4 TherapeuticsInc 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 Transaction History module to view history of all your transactions and understand their impact on performance.