Correlation Between Evolent Health and Nextgen Healthcare
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Nextgen Healthcare 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 Nextgen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Nextgen Healthcare, you can compare the effects of market volatilities on Evolent Health and Nextgen Healthcare 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 Nextgen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Nextgen Healthcare.
Diversification Opportunities for Evolent Health and Nextgen Healthcare
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Evolent and Nextgen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Nextgen Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen Healthcare 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 Nextgen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen Healthcare has no effect on the direction of Evolent Health i.e., Evolent Health and Nextgen Healthcare go up and down completely randomly.
Pair Corralation between Evolent Health and Nextgen Healthcare
If you would invest 1,653 in Nextgen Healthcare on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Nextgen Healthcare or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Evolent Health vs. Nextgen Healthcare
Performance |
| Timeline |
| Evolent Health |
| Nextgen Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Evolent Health and Nextgen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Nextgen Healthcare
The main advantage of trading using opposite Evolent Health and Nextgen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Nextgen Healthcare 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 Nextgen Healthcare will offset losses from the drop in Nextgen Healthcare's long position.| Evolent Health vs. HealthStream | Evolent Health vs. National Research Corp | Evolent Health vs. Forian Inc | Evolent Health vs. HealthEquity |
| Nextgen Healthcare vs. National Research Corp | Nextgen Healthcare vs. Definitive Healthcare Corp | Nextgen Healthcare vs. HealthStream | Nextgen Healthcare 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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