Correlation Between Agilon Health and Revolution Medicines
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Revolution Medicines 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 Revolution Medicines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Revolution Medicines, you can compare the effects of market volatilities on Agilon Health and Revolution Medicines 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 Revolution Medicines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Revolution Medicines.
Diversification Opportunities for Agilon Health and Revolution Medicines
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agilon and Revolution is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Revolution Medicines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolution Medicines 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 Revolution Medicines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolution Medicines has no effect on the direction of Agilon Health i.e., Agilon Health and Revolution Medicines go up and down completely randomly.
Pair Corralation between Agilon Health and Revolution Medicines
Considering the 90-day investment horizon agilon health is expected to under-perform the Revolution Medicines. In addition to that, Agilon Health is 4.48 times more volatile than Revolution Medicines. It trades about -0.01 of its total potential returns per unit of risk. Revolution Medicines is currently generating about 0.3 per unit of volatility. If you would invest 5,050 in Revolution Medicines on August 31, 2024 and sell it today you would earn a total of 808.00 from holding Revolution Medicines or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
agilon health vs. Revolution Medicines
Performance |
| Timeline |
| agilon health |
| Revolution Medicines |
Agilon Health and Revolution Medicines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Revolution Medicines
The main advantage of trading using opposite Agilon Health and Revolution Medicines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Revolution Medicines 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 Revolution Medicines will offset losses from the drop in Revolution Medicines' 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 |
| Revolution Medicines vs. Cue Biopharma | Revolution Medicines vs. Eliem Therapeutics | Revolution Medicines vs. Inhibrx | Revolution Medicines vs. Molecular Partners AG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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