Correlation Between Agilon Health and Anavex Life
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Anavex Life 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 Anavex Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Anavex Life Sciences, you can compare the effects of market volatilities on Agilon Health and Anavex Life 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 Anavex Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Anavex Life.
Diversification Opportunities for Agilon Health and Anavex Life
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agilon and Anavex is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Anavex Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anavex Life Sciences 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 Anavex Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anavex Life Sciences has no effect on the direction of Agilon Health i.e., Agilon Health and Anavex Life go up and down completely randomly.
Pair Corralation between Agilon Health and Anavex Life
Considering the 90-day investment horizon agilon health is expected to under-perform the Anavex Life. In addition to that, Agilon Health is 1.12 times more volatile than Anavex Life Sciences. It trades about -0.09 of its total potential returns per unit of risk. Anavex Life Sciences is currently generating about 0.05 per unit of volatility. If you would invest 721.00 in Anavex Life Sciences on August 26, 2024 and sell it today you would earn a total of 190.00 from holding Anavex Life Sciences or generate 26.35% 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. Anavex Life Sciences
Performance |
| Timeline |
| agilon health |
| Anavex Life Sciences |
Agilon Health and Anavex Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Anavex Life
The main advantage of trading using opposite Agilon Health and Anavex Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Anavex Life 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 Anavex Life will offset losses from the drop in Anavex Life's long position.The idea behind agilon health and Anavex Life Sciences 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.| Anavex Life vs. Cassava Sciences | Anavex Life vs. INmune Bio | Anavex Life vs. Biovie Inc | Anavex Life vs. Cognition 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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