Correlation Between Evolent Health and Certara
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Certara 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 Certara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Certara, you can compare the effects of market volatilities on Evolent Health and Certara 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 Certara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Certara.
Diversification Opportunities for Evolent Health and Certara
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolent and Certara is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Certara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Certara 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 Certara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Certara has no effect on the direction of Evolent Health i.e., Evolent Health and Certara go up and down completely randomly.
Pair Corralation between Evolent Health and Certara
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Certara. In addition to that, Evolent Health is 1.89 times more volatile than Certara. It trades about -0.13 of its total potential returns per unit of risk. Certara is currently generating about -0.01 per unit of volatility. If you would invest 1,103 in Certara on September 9, 2024 and sell it today you would lose (18.00) from holding Certara or give up 1.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Evolent Health vs. Certara
Performance |
Timeline |
Evolent Health |
Certara |
Evolent Health and Certara Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evolent Health and Certara
The main advantage of trading using opposite Evolent Health and Certara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Certara 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 Certara will offset losses from the drop in Certara's long position.Evolent Health vs. HealthStream | Evolent Health vs. National Research Corp | Evolent Health vs. Forian Inc | Evolent Health vs. HealthEquity |
Certara vs. National Research Corp | Certara vs. Health Catalyst | Certara vs. HealthStream | Certara vs. Privia Health Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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