Correlation Between Superior Plus and Evolent Health
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Evolent Health, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Evolent Health.
Diversification Opportunities for Superior Plus and Evolent Health
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and Evolent is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Evolent Health go up and down completely randomly.
Pair Corralation between Superior Plus and Evolent Health
Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.54 times more return on investment than Evolent Health. However, Superior Plus Corp is 1.86 times less risky than Evolent Health. It trades about -0.01 of its potential returns per unit of risk. Evolent Health is currently generating about -0.3 per unit of risk. If you would invest 428.00 in Superior Plus Corp on August 29, 2024 and sell it today you would lose (18.00) from holding Superior Plus Corp or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Evolent Health
Performance |
| Timeline |
| Superior Plus Corp |
| Evolent Health |
Superior Plus and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Evolent Health
The main advantage of trading using opposite Superior Plus and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Canon Marketing Japan | Superior Plus vs. CANON MARKETING JP | Superior Plus vs. KRISPY KREME DL 01 | Superior Plus vs. SIDETRADE EO 1 |
| Evolent Health vs. APPLIED MATERIALS | Evolent Health vs. SANOK RUBBER ZY | Evolent Health vs. TRAINLINE PLC LS | Evolent Health vs. GOLD ROAD RES |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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