Correlation Between Agilon Health and Solventum Corp
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Solventum Corp 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 Solventum Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Solventum Corp, you can compare the effects of market volatilities on Agilon Health and Solventum Corp 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 Solventum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Solventum Corp.
Diversification Opportunities for Agilon Health and Solventum Corp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agilon and Solventum is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Solventum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solventum Corp 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 Solventum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solventum Corp has no effect on the direction of Agilon Health i.e., Agilon Health and Solventum Corp go up and down completely randomly.
Pair Corralation between Agilon Health and Solventum Corp
Considering the 90-day investment horizon agilon health is expected to under-perform the Solventum Corp. In addition to that, Agilon Health is 6.7 times more volatile than Solventum Corp. It trades about -0.11 of its total potential returns per unit of risk. Solventum Corp is currently generating about -0.07 per unit of volatility. If you would invest 7,336 in Solventum Corp on August 27, 2024 and sell it today you would lose (175.00) from holding Solventum Corp or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
agilon health vs. Solventum Corp
Performance |
| Timeline |
| agilon health |
| Solventum Corp |
Agilon Health and Solventum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Solventum Corp
The main advantage of trading using opposite Agilon Health and Solventum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Solventum Corp 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 Solventum Corp will offset losses from the drop in Solventum Corp's 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 |
| Solventum Corp vs. Heartbeam | Solventum Corp vs. EUDA Health Holdings | Solventum Corp vs. Nutex Health | Solventum Corp vs. Healthcare Triangle |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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