Correlation Between Evolent Health and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Evolent Health and BANK HANDLOWY 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 Evolent Health and BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and BANK HANDLOWY, you can compare the effects of market volatilities on Evolent Health and BANK HANDLOWY 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 Evolent Health with a short position of BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and BANK HANDLOWY.
Diversification Opportunities for Evolent Health and BANK HANDLOWY
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolent and BANK is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY and Evolent 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 Evolent Health are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Evolent Health i.e., Evolent Health and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Evolent Health and BANK HANDLOWY
Assuming the 90 days horizon Evolent Health is expected to under-perform the BANK HANDLOWY. In addition to that, Evolent Health is 8.3 times more volatile than BANK HANDLOWY. It trades about -0.21 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.06 per unit of volatility. If you would invest 2,110 in BANK HANDLOWY on September 12, 2024 and sell it today you would earn a total of 55.00 from holding BANK HANDLOWY or generate 2.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Evolent Health vs. BANK HANDLOWY
Performance |
Timeline |
Evolent Health |
BANK HANDLOWY |
Evolent Health and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evolent Health and BANK HANDLOWY
The main advantage of trading using opposite Evolent Health and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.Evolent Health vs. CompuGroup Medical SE | Evolent Health vs. Compugroup Medical SE | Evolent Health vs. Superior Plus Corp | Evolent Health vs. NMI Holdings |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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