Correlation Between Agilon Health and Akero Therapeutics
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Akero 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 Agilon Health and Akero Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Akero Therapeutics, you can compare the effects of market volatilities on Agilon Health and Akero 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 Agilon Health with a short position of Akero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Akero Therapeutics.
Diversification Opportunities for Agilon Health and Akero Therapeutics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agilon and Akero is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Akero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akero Therapeutics and Agilon Health 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 agilon health are associated (or correlated) with Akero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akero Therapeutics has no effect on the direction of Agilon Health i.e., Agilon Health and Akero Therapeutics go up and down completely randomly.
Pair Corralation between Agilon Health and Akero Therapeutics
Considering the 90-day investment horizon agilon health is expected to under-perform the Akero Therapeutics. In addition to that, Agilon Health is 2.9 times more volatile than Akero Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Akero Therapeutics is currently generating about 0.03 per unit of volatility. If you would invest 3,173 in Akero Therapeutics on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Akero Therapeutics or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
agilon health vs. Akero Therapeutics
Performance |
| Timeline |
| agilon health |
| Akero Therapeutics |
Agilon Health and Akero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Akero Therapeutics
The main advantage of trading using opposite Agilon Health and Akero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Akero 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 Akero Therapeutics will offset losses from the drop in Akero Therapeutics' long position.| Agilon Health vs. Humana Inc | Agilon Health vs. Cigna Corp | Agilon Health vs. Elevance Health | Agilon Health vs. Centene Corp |
| Akero Therapeutics vs. Terns Pharmaceuticals | Akero Therapeutics vs. Madrigal Pharmaceuticals | Akero Therapeutics vs. Inozyme Pharma | Akero Therapeutics vs. Viking Therapeutics |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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