Correlation Between Evolent Health and CareCloud
Can any of the company-specific risk be diversified away by investing in both Evolent Health and CareCloud 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 CareCloud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and CareCloud, you can compare the effects of market volatilities on Evolent Health and CareCloud 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 CareCloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and CareCloud.
Diversification Opportunities for Evolent Health and CareCloud
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evolent and CareCloud is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud 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 CareCloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareCloud has no effect on the direction of Evolent Health i.e., Evolent Health and CareCloud go up and down completely randomly.
Pair Corralation between Evolent Health and CareCloud
Considering the 90-day investment horizon Evolent Health is expected to under-perform the CareCloud. In addition to that, Evolent Health is 1.53 times more volatile than CareCloud. It trades about -0.18 of its total potential returns per unit of risk. CareCloud is currently generating about 0.22 per unit of volatility. If you would invest 1,247 in CareCloud on August 31, 2024 and sell it today you would earn a total of 451.00 from holding CareCloud or generate 36.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolent Health vs. CareCloud
Performance |
| Timeline |
| Evolent Health |
| CareCloud |
Evolent Health and CareCloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and CareCloud
The main advantage of trading using opposite Evolent Health and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, CareCloud 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 CareCloud will offset losses from the drop in CareCloud's long position.| Evolent Health vs. CareMax | Evolent Health vs. Certara | Evolent Health vs. Definitive Healthcare Corp | Evolent Health vs. National Research Corp |
| CareCloud vs. Evolent Health | CareCloud vs. Simulations Plus | CareCloud vs. Privia Health Group | CareCloud vs. HealthStream |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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