Correlation Between Evolent Health and Identiv

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

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

Diversification Opportunities for Evolent Health and Identiv

-0.83

Correlation Coefficient

Evolent Health  Identiv

Pay attention - limited upside

The 3 months correlation between Evolent and Identiv is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Evolent Health i.e., Evolent Health and Identiv go up and down completely randomly.

Pair Corralation between Evolent Health and Identiv

Assuming the 90 days horizon Evolent Health is expected to generate 0.94 times more return on investment than Identiv. However, Evolent Health is 1.07 times less risky than Identiv. It trades about 0.15 of its potential returns per unit of risk. Identiv is currently generating about -0.08 per unit of risk. If you would invest  1,050  in Evolent Health on October 8, 2024 and sell it today you would earn a total of  60.00  from holding Evolent Health or generate 5.71% 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.  Identiv

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.

Identiv

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Identiv are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Identiv reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolent Health and Identiv

The main advantage of trading using opposite Evolent Health and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.

The idea behind Evolent Health and Identiv 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.