Correlation Between Evolent Health and Outset Medical
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Outset Medical 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 Outset Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Outset Medical, you can compare the effects of market volatilities on Evolent Health and Outset Medical 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 Outset Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Outset Medical.
Diversification Opportunities for Evolent Health and Outset Medical
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evolent and Outset is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Outset Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outset Medical 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 Outset Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outset Medical has no effect on the direction of Evolent Health i.e., Evolent Health and Outset Medical go up and down completely randomly.
Pair Corralation between Evolent Health and Outset Medical
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Outset Medical. In addition to that, Evolent Health is 1.47 times more volatile than Outset Medical. It trades about -0.21 of its total potential returns per unit of risk. Outset Medical is currently generating about 0.33 per unit of volatility. If you would invest 55.00 in Outset Medical on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Outset Medical or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Evolent Health vs. Outset Medical
Performance |
| Timeline |
| Evolent Health |
| Outset Medical |
Evolent Health and Outset Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Outset Medical
The main advantage of trading using opposite Evolent Health and Outset Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Outset Medical 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 Outset Medical will offset losses from the drop in Outset Medical's long position.| Evolent Health vs. HealthStream | Evolent Health vs. National Research Corp | Evolent Health vs. Forian Inc | Evolent Health vs. HealthEquity |
| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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