Correlation Between Evolent Health and Paragon 28
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Paragon 28 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 Paragon 28 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Paragon 28, you can compare the effects of market volatilities on Evolent Health and Paragon 28 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 Paragon 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Paragon 28.
Diversification Opportunities for Evolent Health and Paragon 28
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evolent and Paragon is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Paragon 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon 28 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 Paragon 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon 28 has no effect on the direction of Evolent Health i.e., Evolent Health and Paragon 28 go up and down completely randomly.
Pair Corralation between Evolent Health and Paragon 28
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Paragon 28. But the stock apears to be less risky and, when comparing its historical volatility, Evolent Health is 1.15 times less risky than Paragon 28. The stock trades about -0.03 of its potential returns per unit of risk. The Paragon 28 is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,934 in Paragon 28 on August 27, 2024 and sell it today you would lose (930.00) from holding Paragon 28 or give up 48.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolent Health vs. Paragon 28
Performance |
| Timeline |
| Evolent Health |
| Paragon 28 |
Evolent Health and Paragon 28 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Paragon 28
The main advantage of trading using opposite Evolent Health and Paragon 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Paragon 28 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 Paragon 28 will offset losses from the drop in Paragon 28's long position.| Evolent Health vs. HealthStream | Evolent Health vs. National Research Corp | Evolent Health vs. Forian Inc | Evolent Health vs. HealthEquity |
| Paragon 28 vs. Heartbeam | Paragon 28 vs. EUDA Health Holdings | Paragon 28 vs. Nutex Health | Paragon 28 vs. Healthcare Triangle |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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