Correlation Between Madrigal Pharmaceuticals and Agenus

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Can any of the company-specific risk be diversified away by investing in both Madrigal Pharmaceuticals and Agenus 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 Madrigal Pharmaceuticals and Agenus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madrigal Pharmaceuticals and Agenus Inc, you can compare the effects of market volatilities on Madrigal Pharmaceuticals and Agenus 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 Madrigal Pharmaceuticals with a short position of Agenus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madrigal Pharmaceuticals and Agenus.

Diversification Opportunities for Madrigal Pharmaceuticals and Agenus

MadrigalAgenusDiversified AwayMadrigalAgenusDiversified Away100%
0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Madrigal and Agenus is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Madrigal Pharmaceuticals and Agenus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agenus Inc and Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals are associated (or correlated) with Agenus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agenus Inc has no effect on the direction of Madrigal Pharmaceuticals i.e., Madrigal Pharmaceuticals and Agenus go up and down completely randomly.

Pair Corralation between Madrigal Pharmaceuticals and Agenus

Given the investment horizon of 90 days Madrigal Pharmaceuticals is expected to generate 0.63 times more return on investment than Agenus. However, Madrigal Pharmaceuticals is 1.58 times less risky than Agenus. It trades about 0.05 of its potential returns per unit of risk. Agenus Inc is currently generating about -0.05 per unit of risk. If you would invest  32,814  in Madrigal Pharmaceuticals on November 25, 2024 and sell it today you would earn a total of  809.00  from holding Madrigal Pharmaceuticals or generate 2.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Madrigal Pharmaceuticals  vs.  Agenus Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10010203040
JavaScript chart by amCharts 3.21.15MDGL AGEN
       Timeline  
Madrigal Pharmaceuticals 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Madrigal Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Madrigal Pharmaceuticals is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb270280290300310320330340350
Agenus Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Agenus Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Agenus is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.62.833.23.43.63.844.2

Madrigal Pharmaceuticals and Agenus Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.63-7.96-5.29-2.620.04452.665.428.1710.9313.69 0.0100.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15MDGL AGEN
       Returns  

Pair Trading with Madrigal Pharmaceuticals and Agenus

The main advantage of trading using opposite Madrigal Pharmaceuticals and Agenus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madrigal Pharmaceuticals position performs unexpectedly, Agenus 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 Agenus will offset losses from the drop in Agenus' long position.
The idea behind Madrigal Pharmaceuticals and Agenus Inc 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.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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