Correlation Between 10X GENOMICS and Evolent Health

Can any of the company-specific risk be diversified away by investing in both 10X GENOMICS 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 10X GENOMICS and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 10X GENOMICS DL and Evolent Health, you can compare the effects of market volatilities on 10X GENOMICS 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 10X GENOMICS with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X GENOMICS and Evolent Health.

Diversification Opportunities for 10X GENOMICS and Evolent Health

0.47

Correlation Coefficient

10X GENOMICS  Evolent Health

Very weak diversification

The 3 months correlation between 10X and Evolent is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding 10X GENOMICS DL and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and 10X GENOMICS 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 10X GENOMICS DL 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 10X GENOMICS i.e., 10X GENOMICS and Evolent Health go up and down completely randomly.

Pair Corralation between 10X GENOMICS and Evolent Health

Assuming the 90 days horizon 10X GENOMICS DL is expected to generate 0.85 times more return on investment than Evolent Health. However, 10X GENOMICS DL is 1.17 times less risky than Evolent Health. It trades about 0.06 of its potential returns per unit of risk. Evolent Health is currently generating about -0.15 per unit of risk. If you would invest  1,443  in 10X GENOMICS DL on October 12, 2024 and sell it today you would earn a total of  167.00  from holding 10X GENOMICS DL or generate 11.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

10X GENOMICS DL  vs.  Evolent Health

10X GENOMICS DL

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 10X GENOMICS DL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, 10X GENOMICS reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with 10X GENOMICS and Evolent Health

The main advantage of trading using opposite 10X GENOMICS and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X GENOMICS 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 10X GENOMICS DL 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 Stocks Directory module to find actively traded stocks across global markets.