Correlation Between Fresenius and Agilon Health

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

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

Diversification Opportunities for Fresenius and Agilon Health

0.75

Correlation Coefficient

Fresenius  Agilon Health

Poor diversification

The 3 months correlation between Fresenius and Agilon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and agilon health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on agilon health and Fresenius 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 Fresenius SE Co 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 Fresenius i.e., Fresenius and Agilon Health go up and down completely randomly.

Pair Corralation between Fresenius and Agilon Health

Assuming the 90 days horizon Fresenius SE Co is expected to under-perform the Agilon Health. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fresenius SE Co is 4.24 times less risky than Agilon Health. The pink sheet trades about -0.22 of its potential returns per unit of risk. The agilon health is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  221.00  in agilon health on October 6, 2024 and sell it today you would lose (12.00) from holding agilon health or give up 5.43% of portfolio value over 90 days.

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

Fresenius SE Co  vs.  agilon health

Fresenius SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresenius SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Fresenius and Agilon Health

The main advantage of trading using opposite Fresenius and Agilon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius 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 Fresenius SE Co 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.