Correlation Between InnovAge Holding and Agilon Health
Can any of the company-specific risk be diversified away by investing in both InnovAge Holding 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 InnovAge Holding and Agilon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnovAge Holding Corp and agilon health, you can compare the effects of market volatilities on InnovAge Holding 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 InnovAge Holding with a short position of Agilon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnovAge Holding and Agilon Health.
Diversification Opportunities for InnovAge Holding and Agilon Health
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InnovAge and Agilon is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding InnovAge Holding Corp and agilon health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on agilon health and InnovAge Holding 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 InnovAge Holding Corp 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 InnovAge Holding i.e., InnovAge Holding and Agilon Health go up and down completely randomly.
Pair Corralation between InnovAge Holding and Agilon Health
Given the investment horizon of 90 days InnovAge Holding Corp is expected to under-perform the Agilon Health. But the stock apears to be less risky and, when comparing its historical volatility, InnovAge Holding Corp is 2.36 times less risky than Agilon Health. The stock trades about -0.4 of its potential returns per unit of risk. The agilon health is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 185.00 in agilon health on October 22, 2024 and sell it today you would earn a total of 124.00 from holding agilon health or generate 67.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnovAge Holding Corp vs. agilon health
Performance |
| Timeline |
| InnovAge Holding Corp |
| agilon health |
InnovAge Holding and Agilon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnovAge Holding and Agilon Health
The main advantage of trading using opposite InnovAge Holding and Agilon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnovAge Holding 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.| InnovAge Holding vs. The Ensign Group | InnovAge Holding vs. Select Medical Holdings | InnovAge Holding vs. Encompass Health Corp | InnovAge Holding vs. Enhabit |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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