Correlation Between AP Møller and Evolent Health
Can any of the company-specific risk be diversified away by investing in both AP Møller 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 AP Møller and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and Evolent Health, you can compare the effects of market volatilities on AP Møller 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 AP Møller with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Møller and Evolent Health.
Diversification Opportunities for AP Møller and Evolent Health
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DP4B and Evolent is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and AP Møller 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 AP Mller 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 AP Møller i.e., AP Møller and Evolent Health go up and down completely randomly.
Pair Corralation between AP Møller and Evolent Health
Assuming the 90 days trading horizon AP Mller is expected to generate 0.34 times more return on investment than Evolent Health. However, AP Mller is 2.93 times less risky than Evolent Health. It trades about 0.18 of its potential returns per unit of risk. Evolent Health is currently generating about -0.3 per unit of risk. If you would invest 141,250 in AP Mller on August 29, 2024 and sell it today you would earn a total of 17,000 from holding AP Mller or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Mller vs. Evolent Health
Performance |
| Timeline |
| AP Møller |
| Evolent Health |
AP Møller and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Møller and Evolent Health
The main advantage of trading using opposite AP Møller and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Møller 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.| AP Møller vs. Superior Plus Corp | AP Møller vs. NMI Holdings | AP Møller vs. Origin Agritech | AP Møller vs. SIVERS SEMICONDUCTORS AB |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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