Correlation Between Agilon Health and Ryman Healthcare

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

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

Diversification Opportunities for Agilon Health and Ryman Healthcare

0.18

Correlation Coefficient

Agilon Health  Ryman Healthcare

Average diversification

The 3 months correlation between Agilon and Ryman is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Ryman Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Healthcare 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 Ryman Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Healthcare has no effect on the direction of Agilon Health i.e., Agilon Health and Ryman Healthcare go up and down completely randomly.

Pair Corralation between Agilon Health and Ryman Healthcare

Considering the 90-day investment horizon agilon health is expected to under-perform the Ryman Healthcare. In addition to that, Agilon Health is 4.04 times more volatile than Ryman Healthcare Limited. It trades about -0.07 of its total potential returns per unit of risk. Ryman Healthcare Limited is currently generating about -0.05 per unit of volatility. If you would invest  282.00  in Ryman Healthcare Limited on September 13, 2024 and sell it today you would lose (21.00) from holding Ryman Healthcare Limited or give up 7.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

agilon health  vs.  Ryman Healthcare Limited

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.

Ryman Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Agilon Health and Ryman Healthcare

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

The idea behind agilon health and Ryman Healthcare Limited 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.