Correlation Between Nanthealth LLC and Evolent Health

Can any of the company-specific risk be diversified away by investing in both Nanthealth LLC 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 Nanthealth LLC and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nanthealth LLC and Evolent Health, you can compare the effects of market volatilities on Nanthealth LLC 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 Nanthealth LLC with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanthealth LLC and Evolent Health.

Diversification Opportunities for Nanthealth LLC and Evolent Health

-0.35

Correlation Coefficient

Nanthealth LLC  Evolent Health

Very good diversification

The 3 months correlation between Nanthealth and Evolent is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nanthealth LLC and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and Nanthealth LLC 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 Nanthealth LLC 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 Nanthealth LLC i.e., Nanthealth LLC and Evolent Health go up and down completely randomly.

Pair Corralation between Nanthealth LLC and Evolent Health

Allowing for the 90-day total investment horizon Nanthealth LLC is expected to under-perform the Evolent Health. In addition to that, Nanthealth LLC is 4.88 times more volatile than Evolent Health. It trades about -0.08 of its total potential returns per unit of risk. Evolent Health is currently generating about 0.0 per unit of volatility. If you would invest  3,070  in Evolent Health on January 24, 2024 and sell it today you would lose (119.00) from holding Evolent Health or give up 3.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	9.71%
Values	Daily Returns

Nanthealth LLC  vs.  Evolent Health

Nanthealth LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanthealth LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Nanthealth LLC is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Evolent Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolent Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Evolent Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nanthealth LLC and Evolent Health

The main advantage of trading using opposite Nanthealth LLC and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanthealth LLC 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.

The idea behind Nanthealth LLC and Evolent Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.