Correlation Between DATATRAK International and Evolent Health

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

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

Diversification Opportunities for DATATRAK International and Evolent Health

0.0

Correlation Coefficient

DATATRAK International  Evolent Health

Pay attention - limited upside

The 3 months correlation between DATATRAK and Evolent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DATATRAK International and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and DATATRAK International 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 DATATRAK International 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 DATATRAK International i.e., DATATRAK International and Evolent Health go up and down completely randomly.

Pair Corralation between DATATRAK International and Evolent Health

If you would invest (100.00) in DATATRAK International on December 26, 2024 and sell it today you would earn a total of  100.00  from holding DATATRAK International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DATATRAK International  vs.  Evolent Health

DATATRAK International

Risk-Adjusted Performance

Very Weak

Over the last 90 days DATATRAK International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, DATATRAK International is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Evolent Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolent Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with DATATRAK International and Evolent Health

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

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.