Correlation Between Evolent Health and Check Cap
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Check Cap 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 Check Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Check Cap, you can compare the effects of market volatilities on Evolent Health and Check Cap 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 Check Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Check Cap.
Diversification Opportunities for Evolent Health and Check Cap
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Evolent and Check is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap 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 Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of Evolent Health i.e., Evolent Health and Check Cap go up and down completely randomly.
Pair Corralation between Evolent Health and Check Cap
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Check Cap. But the stock apears to be less risky and, when comparing its historical volatility, Evolent Health is 1.57 times less risky than Check Cap. The stock trades about -0.02 of its potential returns per unit of risk. The Check Cap is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Check Cap on August 28, 2024 and sell it today you would lose (184.00) from holding Check Cap or give up 69.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolent Health vs. Check Cap
Performance |
| Timeline |
| Evolent Health |
| Check Cap |
Evolent Health and Check Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Check Cap
The main advantage of trading using opposite Evolent Health and Check Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Check Cap 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 Check Cap will offset losses from the drop in Check Cap's long position.| Evolent Health vs. HealthStream | Evolent Health vs. National Research Corp | Evolent Health vs. Forian Inc | Evolent Health vs. HealthEquity |
| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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