Correlation Between PNC Financial and Evolent Health
Can any of the company-specific risk be diversified away by investing in both PNC Financial and Evolent Health 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 PNC Financial and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNC Financial Services and Evolent Health, you can compare the effects of market volatilities on PNC Financial and Evolent Health 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 PNC Financial with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and Evolent Health.
Diversification Opportunities for PNC Financial and Evolent Health
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between PNC and Evolent is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and PNC Financial 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 PNC Financial Services are associated (or correlated) with Evolent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolent Health has no effect on the direction of PNC Financial i.e., PNC Financial and Evolent Health go up and down completely randomly.
Pair Corralation between PNC Financial and Evolent Health
Assuming the 90 days trading horizon PNC Financial Services is expected to generate 0.36 times more return on investment than Evolent Health. However, PNC Financial Services is 2.81 times less risky than Evolent Health. It trades about 0.15 of its potential returns per unit of risk. Evolent Health is currently generating about -0.17 per unit of risk. If you would invest 18,542 in PNC Financial Services on November 8, 2024 and sell it today you would earn a total of 858.00 from holding PNC Financial Services or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PNC Financial Services vs. Evolent Health
Performance |
| Timeline |
| PNC Financial Services |
| Evolent Health |
PNC Financial and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and Evolent Health
The main advantage of trading using opposite PNC Financial and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, Evolent Health 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 Evolent Health will offset losses from the drop in Evolent Health's long position.| PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc |
| Evolent Health vs. Veeva Systems | Evolent Health vs. 10X GENOMICS DL | Evolent Health vs. COMPUGROUP MEDSPADR 1 | Evolent Health vs. CompuGroup Medical SE |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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