Correlation Between Evolent Health and Owlet
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Owlet 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 Owlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Owlet Inc, you can compare the effects of market volatilities on Evolent Health and Owlet 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 Owlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Owlet.
Diversification Opportunities for Evolent Health and Owlet
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolent and Owlet is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Owlet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owlet Inc 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 Owlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owlet Inc has no effect on the direction of Evolent Health i.e., Evolent Health and Owlet go up and down completely randomly.
Pair Corralation between Evolent Health and Owlet
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Owlet. In addition to that, Evolent Health is 2.01 times more volatile than Owlet Inc. It trades about -0.15 of its total potential returns per unit of risk. Owlet Inc is currently generating about -0.04 per unit of volatility. If you would invest 455.00 in Owlet Inc on November 4, 2024 and sell it today you would lose (9.00) from holding Owlet Inc or give up 1.98% 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. Owlet Inc
Performance |
| Timeline |
| Evolent Health |
| Owlet Inc |
Evolent Health and Owlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Owlet
The main advantage of trading using opposite Evolent Health and Owlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Owlet 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 Owlet will offset losses from the drop in Owlet's long position.| Evolent Health vs. CareMax | Evolent Health vs. Certara | Evolent Health vs. Definitive Healthcare Corp | Evolent Health vs. National Research 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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