Correlation Between Agilon Health and Design Therapeutics
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Design 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 Design 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 Design Therapeutics, you can compare the effects of market volatilities on Agilon Health and Design 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 Design Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Design Therapeutics.
Diversification Opportunities for Agilon Health and Design Therapeutics
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agilon and Design is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Design Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Design 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 Design Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Design Therapeutics has no effect on the direction of Agilon Health i.e., Agilon Health and Design Therapeutics go up and down completely randomly.
Pair Corralation between Agilon Health and Design Therapeutics
Considering the 90-day investment horizon agilon health is expected to under-perform the Design Therapeutics. In addition to that, Agilon Health is 1.71 times more volatile than Design Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Design Therapeutics is currently generating about 0.04 per unit of volatility. If you would invest 553.00 in Design Therapeutics on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Design Therapeutics or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
agilon health vs. Design Therapeutics
Performance |
| Timeline |
| agilon health |
| Design Therapeutics |
Agilon Health and Design Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Design Therapeutics
The main advantage of trading using opposite Agilon Health and Design Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Design 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 Design Therapeutics will offset losses from the drop in Design Therapeutics' 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 |
| Design Therapeutics vs. Monte Rosa Therapeutics | Design Therapeutics vs. Werewolf Therapeutics | Design Therapeutics vs. Ikena Oncology | Design Therapeutics vs. Stoke 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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