Correlation Between Evolent Health and Koninklijke Philips
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Koninklijke Philips 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 Koninklijke Philips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Koninklijke Philips NV, you can compare the effects of market volatilities on Evolent Health and Koninklijke Philips 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 Koninklijke Philips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Koninklijke Philips.
Diversification Opportunities for Evolent Health and Koninklijke Philips
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolent and Koninklijke is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Koninklijke Philips NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Philips 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 Koninklijke Philips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Philips has no effect on the direction of Evolent Health i.e., Evolent Health and Koninklijke Philips go up and down completely randomly.
Pair Corralation between Evolent Health and Koninklijke Philips
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Koninklijke Philips. In addition to that, Evolent Health is 1.76 times more volatile than Koninklijke Philips NV. It trades about -0.06 of its total potential returns per unit of risk. Koninklijke Philips NV is currently generating about 0.06 per unit of volatility. If you would invest 1,986 in Koninklijke Philips NV on August 27, 2024 and sell it today you would earn a total of 653.00 from holding Koninklijke Philips NV or generate 32.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolent Health vs. Koninklijke Philips NV
Performance |
| Timeline |
| Evolent Health |
| Koninklijke Philips |
Evolent Health and Koninklijke Philips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Koninklijke Philips
The main advantage of trading using opposite Evolent Health and Koninklijke Philips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Koninklijke Philips 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 Koninklijke Philips will offset losses from the drop in Koninklijke Philips' long position.| Evolent Health vs. CareMax | Evolent Health vs. Certara | Evolent Health vs. R1 RCM Inc | Evolent Health vs. Definitive Healthcare Corp |
| Koninklijke Philips vs. Heartbeam | Koninklijke Philips vs. EUDA Health Holdings | Koninklijke Philips vs. Nutex Health | Koninklijke Philips vs. Healthcare Triangle |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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