Correlation Between Agilon Health and IDEXX Laboratories
Can any of the company-specific risk be diversified away by investing in both Agilon Health and IDEXX Laboratories 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 IDEXX Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and IDEXX Laboratories, you can compare the effects of market volatilities on Agilon Health and IDEXX Laboratories 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 IDEXX Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and IDEXX Laboratories.
Diversification Opportunities for Agilon Health and IDEXX Laboratories
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agilon and IDEXX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and IDEXX Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEXX Laboratories 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 IDEXX Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEXX Laboratories has no effect on the direction of Agilon Health i.e., Agilon Health and IDEXX Laboratories go up and down completely randomly.
Pair Corralation between Agilon Health and IDEXX Laboratories
Considering the 90-day investment horizon agilon health is expected to under-perform the IDEXX Laboratories. In addition to that, Agilon Health is 3.7 times more volatile than IDEXX Laboratories. It trades about -0.13 of its total potential returns per unit of risk. IDEXX Laboratories is currently generating about -0.08 per unit of volatility. If you would invest 50,540 in IDEXX Laboratories on August 24, 2024 and sell it today you would lose (8,685) from holding IDEXX Laboratories or give up 17.18% 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. IDEXX Laboratories
Performance |
| Timeline |
| agilon health |
| IDEXX Laboratories |
Agilon Health and IDEXX Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and IDEXX Laboratories
The main advantage of trading using opposite Agilon Health and IDEXX Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, IDEXX Laboratories 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 IDEXX Laboratories will offset losses from the drop in IDEXX Laboratories' long position.| Agilon Health vs. The Ensign Group | Agilon Health vs. Universal Health Services | Agilon Health vs. Encompass Health Corp | Agilon Health vs. Surgery Partners |
| IDEXX Laboratories vs. Waters | IDEXX Laboratories vs. IQVIA Holdings | IDEXX Laboratories vs. Charles River Laboratories | IDEXX Laboratories vs. Revvity |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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