Correlation Between Agilon Health and Bluebird Bio
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Bluebird Bio 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 Bluebird Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Bluebird bio, you can compare the effects of market volatilities on Agilon Health and Bluebird Bio 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 Bluebird Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Bluebird Bio.
Diversification Opportunities for Agilon Health and Bluebird Bio
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agilon and Bluebird is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Bluebird bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluebird bio 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 Bluebird Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluebird bio has no effect on the direction of Agilon Health i.e., Agilon Health and Bluebird Bio go up and down completely randomly.
Pair Corralation between Agilon Health and Bluebird Bio
Considering the 90-day investment horizon agilon health is expected to generate 1.59 times more return on investment than Bluebird Bio. However, Agilon Health is 1.59 times more volatile than Bluebird bio. It trades about -0.11 of its potential returns per unit of risk. Bluebird bio is currently generating about -0.2 per unit of risk. If you would invest 270.00 in agilon health on August 27, 2024 and sell it today you would lose (81.00) from holding agilon health or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
agilon health vs. Bluebird bio
Performance |
| Timeline |
| agilon health |
| Bluebird bio |
Agilon Health and Bluebird Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Bluebird Bio
The main advantage of trading using opposite Agilon Health and Bluebird Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Bluebird Bio 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 Bluebird Bio will offset losses from the drop in Bluebird Bio's long position.| Agilon Health vs. The Ensign Group | Agilon Health vs. Universal Health Services | Agilon Health vs. Addus HomeCare | Agilon Health vs. Encompass Health Corp |
| Bluebird Bio vs. Eliem Therapeutics | Bluebird Bio vs. HCW Biologics | Bluebird Bio vs. Scpharmaceuticals | Bluebird Bio vs. Milestone Pharmaceuticals |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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