Correlation Between Evolent Health and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Evolent Health and Southwest Airlines 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 Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolent Health and Southwest Airlines Co, you can compare the effects of market volatilities on Evolent Health and Southwest Airlines 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 Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolent Health and Southwest Airlines.
Diversification Opportunities for Evolent Health and Southwest Airlines
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evolent and Southwest is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Southwest Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines 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 Southwest Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwest Airlines has no effect on the direction of Evolent Health i.e., Evolent Health and Southwest Airlines go up and down completely randomly.
Pair Corralation between Evolent Health and Southwest Airlines
Assuming the 90 days horizon Evolent Health is expected to under-perform the Southwest Airlines. In addition to that, Evolent Health is 1.7 times more volatile than Southwest Airlines Co. It trades about -0.03 of its total potential returns per unit of risk. Southwest Airlines Co is currently generating about 0.02 per unit of volatility. If you would invest 3,003 in Southwest Airlines Co on September 26, 2024 and sell it today you would earn a total of 177.00 from holding Southwest Airlines Co or generate 5.89% 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. Southwest Airlines Co
Performance |
Timeline |
Evolent Health |
Southwest Airlines |
Evolent Health and Southwest Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evolent Health and Southwest Airlines
The main advantage of trading using opposite Evolent Health and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolent Health position performs unexpectedly, Southwest Airlines 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 Southwest Airlines will offset losses from the drop in Southwest Airlines' long position.Evolent Health vs. Southwest Airlines Co | Evolent Health vs. Aegean Airlines SA | Evolent Health vs. United Airlines Holdings | Evolent Health vs. The Boston Beer |
Southwest Airlines vs. Gruppo Mutuionline SpA | Southwest Airlines vs. Lamar Advertising | Southwest Airlines vs. SALESFORCE INC CDR | Southwest Airlines vs. LG Display Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |