Correlation Between Health Catalyst and Evolent Health
Can any of the company-specific risk be diversified away by investing in both Health Catalyst and Evolent Health 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 Health Catalyst and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Catalyst and Evolent Health, you can compare the effects of market volatilities on Health Catalyst and Evolent Health 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 Health Catalyst with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Catalyst and Evolent Health.
Diversification Opportunities for Health Catalyst and Evolent Health
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Health and Evolent is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Health Catalyst and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and Health Catalyst 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 Health Catalyst are associated (or correlated) with Evolent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolent Health has no effect on the direction of Health Catalyst i.e., Health Catalyst and Evolent Health go up and down completely randomly.
Pair Corralation between Health Catalyst and Evolent Health
Given the investment horizon of 90 days Health Catalyst is expected to generate 0.45 times more return on investment than Evolent Health. However, Health Catalyst is 2.22 times less risky than Evolent Health. It trades about 0.04 of its potential returns per unit of risk. Evolent Health is currently generating about -0.22 per unit of risk. If you would invest 776.00 in Health Catalyst on September 6, 2024 and sell it today you would earn a total of 17.00 from holding Health Catalyst or generate 2.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Health Catalyst vs. Evolent Health
Performance |
Timeline |
Health Catalyst |
Evolent Health |
Health Catalyst and Evolent Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Health Catalyst and Evolent Health
The main advantage of trading using opposite Health Catalyst and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Catalyst position performs unexpectedly, Evolent Health 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 Evolent Health will offset losses from the drop in Evolent Health's long position.Health Catalyst vs. National Research Corp | Health Catalyst vs. Certara | Health Catalyst vs. HealthStream | Health Catalyst vs. Forian Inc |
Evolent Health vs. CareMax | Evolent Health vs. Certara | Evolent Health vs. Definitive Healthcare Corp | Evolent Health vs. National Research 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 the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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