Correlation Between Evolent Health and Sensus Healthcare
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Sensus 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 Sensus 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 Sensus Healthcare, you can compare the effects of market volatilities on Evolent Health and Sensus 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 Sensus Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Sensus Healthcare.
Diversification Opportunities for Evolent Health and Sensus Healthcare
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evolent and Sensus is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Sensus Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensus 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 Sensus Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensus Healthcare has no effect on the direction of Evolent Health i.e., Evolent Health and Sensus Healthcare go up and down completely randomly.
Pair Corralation between Evolent Health and Sensus Healthcare
Considering the 90-day investment horizon Evolent Health is expected to under-perform the Sensus Healthcare. In addition to that, Evolent Health is 2.98 times more volatile than Sensus Healthcare. It trades about -0.18 of its total potential returns per unit of risk. Sensus Healthcare is currently generating about 0.32 per unit of volatility. If you would invest 675.00 in Sensus Healthcare on August 31, 2024 and sell it today you would earn a total of 185.00 from holding Sensus Healthcare or generate 27.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolent Health vs. Sensus Healthcare
Performance |
| Timeline |
| Evolent Health |
| Sensus Healthcare |
Evolent Health and Sensus Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolent Health and Sensus Healthcare
The main advantage of trading using opposite Evolent Health and Sensus Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Sensus 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 Sensus Healthcare will offset losses from the drop in Sensus Healthcare's long position.| Evolent Health vs. CareMax | Evolent Health vs. Certara | Evolent Health vs. Definitive Healthcare Corp | Evolent Health vs. National Research Corp |
| Sensus Healthcare vs. Ainos Inc | Sensus Healthcare vs. SurModics | Sensus Healthcare vs. LENSAR Inc | Sensus Healthcare vs. IRIDEX |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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