Correlation Between Agilon Health and Brickell Biotech

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Can any of the company-specific risk be diversified away by investing in both Agilon Health and Brickell Biotech 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 Brickell Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilon Health and Brickell Biotech, you can compare the effects of market volatilities on Agilon Health and Brickell Biotech 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 Brickell Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Brickell Biotech.

Diversification Opportunities for Agilon Health and Brickell Biotech

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Agilon and Brickell is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Agilon Health and Brickell Biotech Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickell Biotech 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 Brickell Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickell Biotech has no effect on the direction of Agilon Health i.e., Agilon Health and Brickell Biotech go up and down completely randomly.

Pair Corralation between Agilon Health and Brickell Biotech

Considering the 90-day investment horizon Agilon Health is expected to generate 0.65 times more return on investment than Brickell Biotech. However, Agilon Health is 1.54 times less risky than Brickell Biotech. It trades about 0.24 of its potential returns per unit of risk. Brickell Biotech is currently generating about -0.3 per unit of risk. If you would invest  2,042  in Agilon Health on July 1, 2022 and sell it today you would earn a total of  320.00  from holding Agilon Health or generate 15.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy72.73%
ValuesDaily Returns

Agilon Health  vs.  Brickell Biotech Inc

 Performance (%) 
       Timeline  
Agilon Health 
Agilon Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Agilon Health are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, Agilon Health may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Agilon Price Channel

Brickell Biotech 
Brickell Performance
0 of 100
Over the last 90 days Brickell Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Agilon Health and Brickell Biotech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilon Health and Brickell Biotech

The main advantage of trading using opposite Agilon Health and Brickell Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Brickell Biotech 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 Brickell Biotech will offset losses from the drop in Brickell Biotech's long position.
Agilon Health vs. Amazon Inc
The idea behind Agilon Health and Brickell Biotech 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.
Brickell Biotech vs. Microsoft Corp
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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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