Correlation Between Evolent Health and Milestone Scientific
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Milestone Scientific 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 Milestone Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Milestone Scientific, you can compare the effects of market volatilities on Evolent Health and Milestone Scientific 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 Milestone Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Milestone Scientific.
Diversification Opportunities for Evolent Health and Milestone Scientific
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolent and Milestone is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Milestone Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Scientific 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 Milestone Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Scientific has no effect on the direction of Evolent Health i.e., Evolent Health and Milestone Scientific go up and down completely randomly.
Pair Corralation between Evolent Health and Milestone Scientific
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Milestone Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Evolent Health is 1.16 times less risky than Milestone Scientific. The stock trades about -0.04 of its potential returns per unit of risk. The Milestone Scientific is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Milestone Scientific on August 31, 2024 and sell it today you would lose (5.00) from holding Milestone Scientific or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolent Health vs. Milestone Scientific
Performance |
| Timeline |
| Evolent Health |
| Milestone Scientific |
Evolent Health and Milestone Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Milestone Scientific
The main advantage of trading using opposite Evolent Health and Milestone Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Milestone Scientific 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 Milestone Scientific will offset losses from the drop in Milestone Scientific's long position.| Evolent Health vs. CareMax | Evolent Health vs. Certara | Evolent Health vs. Definitive Healthcare Corp | Evolent Health vs. National Research Corp |
| Milestone Scientific vs. InfuSystems Holdings | Milestone Scientific vs. STRATA Skin Sciences | Milestone Scientific vs. Retractable Technologies | Milestone Scientific vs. OncoCyte Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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