Correlation Between Evolent Health and RLX TECH
Can any of the company-specific risk be diversified away by investing in both Evolent Health and RLX TECH 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 RLX TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and RLX TECH SPADR1, you can compare the effects of market volatilities on Evolent Health and RLX TECH 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 RLX TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and RLX TECH.
Diversification Opportunities for Evolent Health and RLX TECH
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evolent and RLX is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and RLX TECH SPADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX TECH SPADR1 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 RLX TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLX TECH SPADR1 has no effect on the direction of Evolent Health i.e., Evolent Health and RLX TECH go up and down completely randomly.
Pair Corralation between Evolent Health and RLX TECH
Assuming the 90 days horizon Evolent Health is expected to generate 1.48 times less return on investment than RLX TECH. In addition to that, Evolent Health is 1.22 times more volatile than RLX TECH SPADR1. It trades about 0.17 of its total potential returns per unit of risk. RLX TECH SPADR1 is currently generating about 0.31 per unit of volatility. If you would invest 189.00 in RLX TECH SPADR1 on October 13, 2024 and sell it today you would earn a total of 21.00 from holding RLX TECH SPADR1 or generate 11.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Evolent Health vs. RLX TECH SPADR1
Performance |
Timeline |
Evolent Health |
RLX TECH SPADR1 |
Evolent Health and RLX TECH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evolent Health and RLX TECH
The main advantage of trading using opposite Evolent Health and RLX TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, RLX TECH 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 RLX TECH will offset losses from the drop in RLX TECH's long position.Evolent Health vs. Computershare Limited | Evolent Health vs. DELTA AIR LINES | Evolent Health vs. Corsair Gaming | Evolent Health vs. RYANAIR HLDGS ADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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