Correlation Between Evolent Health and Genertec Universal
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Genertec Universal 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 Genertec Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Genertec Universal Medical, you can compare the effects of market volatilities on Evolent Health and Genertec Universal 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 Genertec Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Genertec Universal.
Diversification Opportunities for Evolent Health and Genertec Universal
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolent and Genertec is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Genertec Universal Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genertec Universal 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 Genertec Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genertec Universal has no effect on the direction of Evolent Health i.e., Evolent Health and Genertec Universal go up and down completely randomly.
Pair Corralation between Evolent Health and Genertec Universal
Assuming the 90 days horizon Evolent Health is expected to generate 0.82 times more return on investment than Genertec Universal. However, Evolent Health is 1.21 times less risky than Genertec Universal. It trades about 0.14 of its potential returns per unit of risk. Genertec Universal Medical is currently generating about 0.02 per unit of risk. If you would invest 1,080 in Evolent Health on October 12, 2024 and sell it today you would earn a total of 70.00 from holding Evolent Health or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolent Health vs. Genertec Universal Medical
Performance |
| Timeline |
| Evolent Health |
| Genertec Universal |
Evolent Health and Genertec Universal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Genertec Universal
The main advantage of trading using opposite Evolent Health and Genertec Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Genertec Universal 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 Genertec Universal will offset losses from the drop in Genertec Universal's long position.| Evolent Health vs. BORR DRILLING NEW | Evolent Health vs. GMO Internet | Evolent Health vs. Charter Communications | Evolent Health vs. Commercial Vehicle Group |
| Genertec Universal vs. Webster Financial | Genertec Universal vs. United Insurance Holdings | Genertec Universal vs. Commonwealth Bank of | Genertec Universal vs. Gaming and Leisure |
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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