Correlation Between Agilon Health and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Puma Biotechnology 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 Puma Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Puma Biotechnology, you can compare the effects of market volatilities on Agilon Health and Puma Biotechnology 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 Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Puma Biotechnology.
Diversification Opportunities for Agilon Health and Puma Biotechnology
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agilon and Puma is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology 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 Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Agilon Health i.e., Agilon Health and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Agilon Health and Puma Biotechnology
Considering the 90-day investment horizon agilon health is expected to under-perform the Puma Biotechnology. In addition to that, Agilon Health is 1.56 times more volatile than Puma Biotechnology. It trades about -0.15 of its total potential returns per unit of risk. Puma Biotechnology is currently generating about 0.1 per unit of volatility. If you would invest 255.00 in Puma Biotechnology on August 26, 2024 and sell it today you would earn a total of 45.00 from holding Puma Biotechnology or generate 17.65% 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. Puma Biotechnology
Performance |
| Timeline |
| agilon health |
| Puma Biotechnology |
Agilon Health and Puma Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Puma Biotechnology
The main advantage of trading using opposite Agilon Health and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.The idea behind agilon health and Puma Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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