Correlation Between CompuGroup Medical and Evolent Health
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical 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 CompuGroup Medical and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical SE and Evolent Health, you can compare the effects of market volatilities on CompuGroup Medical 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 CompuGroup Medical with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Evolent Health.
Diversification Opportunities for CompuGroup Medical and Evolent Health
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CompuGroup and Evolent is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and CompuGroup Medical 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 CompuGroup Medical SE 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 CompuGroup Medical i.e., CompuGroup Medical and Evolent Health go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Evolent Health
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the Evolent Health. But the stock apears to be less risky and, when comparing its historical volatility, CompuGroup Medical SE is 1.35 times less risky than Evolent Health. The stock trades about -0.06 of its potential returns per unit of risk. The Evolent Health is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,680 in Evolent Health on August 25, 2024 and sell it today you would lose (1,610) from holding Evolent Health or give up 60.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Evolent Health
Performance |
| Timeline |
| CompuGroup Medical |
| Evolent Health |
CompuGroup Medical and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Evolent Health
The main advantage of trading using opposite CompuGroup Medical and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical 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.| CompuGroup Medical vs. Evolent Health | CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. NMI Holdings | CompuGroup Medical vs. Origin Agritech |
| Evolent Health vs. Superior Plus Corp | Evolent Health vs. NMI Holdings | Evolent Health vs. Origin Agritech | Evolent Health vs. SIVERS SEMICONDUCTORS AB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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