Correlation Between Alector and Agenus

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

By analyzing existing cross correlation between Alector and Agenus Inc, you can compare the effects of market volatilities on Alector 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 Alector with a short position of Agenus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alector and Agenus.

Diversification Opportunities for Alector and Agenus

0.77

Correlation Coefficient

Alector  Agenus

Poor diversification

The 3 months correlation between Alector and Agenus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alector and Agenus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agenus Inc and Alector 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 Alector 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 Alector i.e., Alector and Agenus go up and down completely randomly.

Pair Corralation between Alector and Agenus

Given the investment horizon of 90 days Alector is expected to generate 0.81 times more return on investment than Agenus. However, Alector is 1.23 times less risky than Agenus. It trades about -0.07 of its potential returns per unit of risk. Agenus Inc is currently generating about -0.12 per unit of risk. If you would invest  172.00  in Alector on December 29, 2024 and sell it today you would lose (39.00) from holding Alector or give up 22.67% of portfolio value over 90 days.

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

Alector  vs.  Agenus Inc

Alector

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Agenus Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agenus Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alector and Agenus

The main advantage of trading using opposite Alector and Agenus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alector 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 Alector 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.