Correlation Between Evolent Health and ReShape Lifesciences
Can any of the company-specific risk be diversified away by investing in both Evolent Health and ReShape Lifesciences 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 ReShape Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and ReShape Lifesciences, you can compare the effects of market volatilities on Evolent Health and ReShape Lifesciences 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 ReShape Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and ReShape Lifesciences.
Diversification Opportunities for Evolent Health and ReShape Lifesciences
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolent and ReShape is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and ReShape Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReShape Lifesciences 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 ReShape Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReShape Lifesciences has no effect on the direction of Evolent Health i.e., Evolent Health and ReShape Lifesciences go up and down completely randomly.
Pair Corralation between Evolent Health and ReShape Lifesciences
Considering the 90-day investment horizon Evolent Health is expected to under-perform the ReShape Lifesciences. In addition to that, Evolent Health is 2.34 times more volatile than ReShape Lifesciences. It trades about -0.16 of its total potential returns per unit of risk. ReShape Lifesciences is currently generating about 0.01 per unit of volatility. If you would invest 574.00 in ReShape Lifesciences on August 28, 2024 and sell it today you would lose (6.00) from holding ReShape Lifesciences or give up 1.05% 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. ReShape Lifesciences
Performance |
| Timeline |
| Evolent Health |
| ReShape Lifesciences |
Evolent Health and ReShape Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and ReShape Lifesciences
The main advantage of trading using opposite Evolent Health and ReShape Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, ReShape Lifesciences 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 ReShape Lifesciences will offset losses from the drop in ReShape Lifesciences' long position.| Evolent Health vs. HealthStream | Evolent Health vs. National Research Corp | Evolent Health vs. Forian Inc | Evolent Health vs. HealthEquity |
| ReShape Lifesciences vs. SINTX Technologies | ReShape Lifesciences vs. Bone Biologics Corp | ReShape Lifesciences vs. Tivic Health Systems | ReShape Lifesciences vs. Nuwellis |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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