Correlation Between Evolent Health and EGF Theramed
Can any of the company-specific risk be diversified away by investing in both Evolent Health and EGF Theramed 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 EGF Theramed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and EGF Theramed Health, you can compare the effects of market volatilities on Evolent Health and EGF Theramed 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 EGF Theramed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and EGF Theramed.
Diversification Opportunities for Evolent Health and EGF Theramed
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolent and EGF is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and EGF Theramed Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGF Theramed Health 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 EGF Theramed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGF Theramed Health has no effect on the direction of Evolent Health i.e., Evolent Health and EGF Theramed go up and down completely randomly.
Pair Corralation between Evolent Health and EGF Theramed
Considering the 90-day investment horizon Evolent Health is expected to under-perform the EGF Theramed. But the stock apears to be less risky and, when comparing its historical volatility, Evolent Health is 17.61 times less risky than EGF Theramed. The stock trades about -0.15 of its potential returns per unit of risk. The EGF Theramed Health is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6.80 in EGF Theramed Health on October 23, 2024 and sell it today you would earn a total of 12.20 from holding EGF Theramed Health or generate 179.41% 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. EGF Theramed Health
Performance |
| Timeline |
| Evolent Health |
| EGF Theramed Health |
Evolent Health and EGF Theramed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and EGF Theramed
The main advantage of trading using opposite Evolent Health and EGF Theramed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, EGF Theramed 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 EGF Theramed will offset losses from the drop in EGF Theramed's long position.| Evolent Health vs. CareMax | Evolent Health vs. Certara | Evolent Health vs. Definitive Healthcare Corp | Evolent Health vs. National Research Corp |
| EGF Theramed vs. Mitesco | EGF Theramed vs. Reliq Health Technologies | EGF Theramed vs. Healthcare Triangle | EGF Theramed vs. Bullfrog AI Holdings, |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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