Correlation Between Agilon Health and Lyra Therapeutics
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Lyra 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 Lyra 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 Lyra Therapeutics, you can compare the effects of market volatilities on Agilon Health and Lyra 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 Lyra Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Lyra Therapeutics.
Diversification Opportunities for Agilon Health and Lyra Therapeutics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilon and Lyra is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Lyra Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyra 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 Lyra Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyra Therapeutics has no effect on the direction of Agilon Health i.e., Agilon Health and Lyra Therapeutics go up and down completely randomly.
Pair Corralation between Agilon Health and Lyra Therapeutics
Considering the 90-day investment horizon agilon health is expected to under-perform the Lyra Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, agilon health is 1.3 times less risky than Lyra Therapeutics. The stock trades about -0.09 of its potential returns per unit of risk. The Lyra Therapeutics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Lyra Therapeutics on August 31, 2024 and sell it today you would lose (267.00) from holding Lyra Therapeutics or give up 92.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
agilon health vs. Lyra Therapeutics
Performance |
| Timeline |
| agilon health |
| Lyra Therapeutics |
Agilon Health and Lyra Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Lyra Therapeutics
The main advantage of trading using opposite Agilon Health and Lyra Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Lyra 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 Lyra Therapeutics will offset losses from the drop in Lyra 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 |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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