Correlation Between Agilon Health and Regional Health

Can any of the company-specific risk be diversified away by investing in both Agilon Health and Regional 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 Agilon Health and Regional Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between agilon health and Regional Health Properties, you can compare the effects of market volatilities on Agilon Health and Regional 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 Agilon Health with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Regional Health.

Diversification Opportunities for Agilon Health and Regional Health

0.63

Correlation Coefficient

Agilon Health  Regional Health

Poor diversification

The 3 months correlation between Agilon and Regional is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop 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 Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Agilon Health i.e., Agilon Health and Regional Health go up and down completely randomly.

Pair Corralation between Agilon Health and Regional Health

Considering the 90-day investment horizon agilon health is expected to generate 1.88 times more return on investment than Regional Health. However, Agilon Health is 1.88 times more volatile than Regional Health Properties. It trades about 0.14 of its potential returns per unit of risk. Regional Health Properties is currently generating about 0.01 per unit of risk. If you would invest  167.00  in agilon health on September 21, 2024 and sell it today you would earn a total of  30.00  from holding agilon health or generate 17.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

agilon health  vs.  Regional Health Properties

agilon health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days agilon health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Regional Health Prop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regional Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Regional Health is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Agilon Health and Regional Health

The main advantage of trading using opposite Agilon Health and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Regional 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 Regional Health will offset losses from the drop in Regional Health's long position.

The idea behind agilon health and Regional Health Properties 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.