Correlation Between Agilon Health and Amedisys

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

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

Diversification Opportunities for Agilon Health and Amedisys

0.74

Correlation Coefficient

Agilon Health  Amedisys

Poor diversification

The 3 months correlation between Agilon and Amedisys is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys 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 Amedisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedisys has no effect on the direction of Agilon Health i.e., Agilon Health and Amedisys go up and down completely randomly.

Pair Corralation between Agilon Health and Amedisys

Considering the 90-day investment horizon agilon health is expected to under-perform the Amedisys. In addition to that, Agilon Health is 7.62 times more volatile than Amedisys. It trades about -0.04 of its total potential returns per unit of risk. Amedisys is currently generating about -0.18 per unit of volatility. If you would invest  9,691  in Amedisys on September 14, 2024 and sell it today you would lose (1,131) from holding Amedisys or give up 11.67% of portfolio value over 90 days.

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

agilon health  vs.  Amedisys

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.

Amedisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amedisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Agilon Health and Amedisys

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

The idea behind agilon health and Amedisys 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.