Correlation Between Evolent Health and Health Catalyst
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Health Catalyst 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 Health Catalyst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Health Catalyst, you can compare the effects of market volatilities on Evolent Health and Health Catalyst 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 Health Catalyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Health Catalyst.
Diversification Opportunities for Evolent Health and Health Catalyst
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evolent and Health is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Health Catalyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Catalyst 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 Health Catalyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Catalyst has no effect on the direction of Evolent Health i.e., Evolent Health and Health Catalyst go up and down completely randomly.
Pair Corralation between Evolent Health and Health Catalyst
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Health Catalyst. In addition to that, Evolent Health is 2.54 times more volatile than Health Catalyst. It trades about -0.22 of its total potential returns per unit of risk. Health Catalyst is currently generating about 0.07 per unit of volatility. If you would invest 778.00 in Health Catalyst on August 25, 2024 and sell it today you would earn a total of 34.50 from holding Health Catalyst or generate 4.43% 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. Health Catalyst
Performance |
| Timeline |
| Evolent Health |
| Health Catalyst |
Evolent Health and Health Catalyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Health Catalyst
The main advantage of trading using opposite Evolent Health and Health Catalyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Health Catalyst 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 Health Catalyst will offset losses from the drop in Health Catalyst's long position.| Evolent Health vs. HealthStream | Evolent Health vs. National Research Corp | Evolent Health vs. HealthEquity | Evolent Health vs. Health Catalyst |
| Health Catalyst vs. National Research Corp | Health Catalyst vs. Certara | Health Catalyst vs. HealthStream | Health Catalyst vs. Forian Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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