Correlation Between Kelly Services and Agilon Health

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

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

Diversification Opportunities for Kelly Services and Agilon Health

0.88

Correlation Coefficient

Kelly Services  Agilon Health

Very poor diversification

The 3 months correlation between Kelly and Agilon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services A and agilon health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on agilon health and Kelly Services 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 Kelly Services A 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 Kelly Services i.e., Kelly Services and Agilon Health go up and down completely randomly.

Pair Corralation between Kelly Services and Agilon Health

Assuming the 90 days horizon Kelly Services A is expected to under-perform the Agilon Health. But the stock apears to be less risky and, when comparing its historical volatility, Kelly Services A is 4.06 times less risky than Agilon Health. The stock trades about -0.17 of its potential returns per unit of risk. The agilon health is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  178.00  in agilon health on September 22, 2024 and sell it today you would earn a total of  10.00  from holding agilon health or generate 5.62% return on investment over 90 days.

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

Kelly Services A  vs.  agilon health

Kelly Services A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kelly Services A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Kelly Services and Agilon Health

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

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.