Correlation Between Evolent Health and DATATRAK International

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

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

Diversification Opportunities for Evolent Health and DATATRAK International

0.0

Correlation Coefficient

Evolent Health  DATATRAK International

Pay attention - limited upside

The 3 months correlation between Evolent and DATATRAK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and DATATRAK International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATATRAK International 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 DATATRAK International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATATRAK International has no effect on the direction of Evolent Health i.e., Evolent Health and DATATRAK International go up and down completely randomly.

Pair Corralation between Evolent Health and DATATRAK International

If you would invest (100.00) in DATATRAK International on December 2, 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

Evolent Health  vs.  DATATRAK International

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.

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.

Pair Trading with Evolent Health and DATATRAK International

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

The idea behind Evolent Health and DATATRAK International 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..