Correlation Between GM and Agilon Health
Can any of the company-specific risk be diversified away by investing in both GM and Agilon Health 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 GM and Agilon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and agilon health, you can compare the effects of market volatilities on GM and Agilon Health 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 GM with a short position of Agilon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Agilon Health.
Diversification Opportunities for GM and Agilon Health
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Agilon is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and agilon health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on agilon health and GM 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 General Motors are associated (or correlated) with Agilon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of agilon health has no effect on the direction of GM i.e., GM and Agilon Health go up and down completely randomly.
Pair Corralation between GM and Agilon Health
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.38 times more return on investment than Agilon Health. However, General Motors is 2.65 times less risky than Agilon Health. It trades about 0.09 of its potential returns per unit of risk. agilon health is currently generating about -0.1 per unit of risk. If you would invest 3,367 in General Motors on August 27, 2024 and sell it today you would earn a total of 2,486 from holding General Motors or generate 73.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. agilon health
Performance |
| Timeline |
| General Motors |
| agilon health |
GM and Agilon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Agilon Health
The main advantage of trading using opposite GM and Agilon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Agilon Health 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 Agilon Health will offset losses from the drop in Agilon Health's long position.The idea behind General Motors and agilon health 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.| Agilon Health vs. The Ensign Group | Agilon Health vs. Universal Health Services | Agilon Health vs. Addus HomeCare | Agilon Health vs. Encompass Health Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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