Correlation Between Agilon Health and Medical Facilities
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Medical Facilities 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 Medical Facilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Medical Facilities, you can compare the effects of market volatilities on Agilon Health and Medical Facilities 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 Medical Facilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Medical Facilities.
Diversification Opportunities for Agilon Health and Medical Facilities
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agilon and Medical is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Medical Facilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Facilities 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 Medical Facilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Facilities has no effect on the direction of Agilon Health i.e., Agilon Health and Medical Facilities go up and down completely randomly.
Pair Corralation between Agilon Health and Medical Facilities
Considering the 90-day investment horizon agilon health is expected to under-perform the Medical Facilities. In addition to that, Agilon Health is 5.72 times more volatile than Medical Facilities. It trades about -0.06 of its total potential returns per unit of risk. Medical Facilities is currently generating about 0.16 per unit of volatility. If you would invest 1,055 in Medical Facilities on August 29, 2024 and sell it today you would earn a total of 67.00 from holding Medical Facilities or generate 6.35% 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. Medical Facilities
Performance |
| Timeline |
| agilon health |
| Medical Facilities |
Agilon Health and Medical Facilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Medical Facilities
The main advantage of trading using opposite Agilon Health and Medical Facilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Medical Facilities 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 Medical Facilities will offset losses from the drop in Medical Facilities' 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 |
| Medical Facilities vs. Rezolute | Medical Facilities vs. Tempest Therapeutics | Medical Facilities vs. Forte Biosciences | Medical Facilities vs. Dyadic International |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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