Correlation Between Evolent Health and FOXO Technologies

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

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

Diversification Opportunities for Evolent Health and FOXO Technologies

0.68

Correlation Coefficient

Evolent Health  FOXO Technologies

Poor diversification

The 3 months correlation between Evolent and FOXO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and FOXO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOXO Technologies 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 FOXO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOXO Technologies has no effect on the direction of Evolent Health i.e., Evolent Health and FOXO Technologies go up and down completely randomly.

Pair Corralation between Evolent Health and FOXO Technologies

Considering the 90-day investment horizon Evolent Health is expected to generate 0.32 times more return on investment than FOXO Technologies. However, Evolent Health is 3.12 times less risky than FOXO Technologies. It trades about -0.05 of its potential returns per unit of risk. FOXO Technologies is currently generating about -0.07 per unit of risk. If you would invest  1,098  in Evolent Health on December 28, 2024 and sell it today you would lose (153.00) from holding Evolent Health or give up 13.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Evolent Health  vs.  FOXO Technologies

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 latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

FOXO Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days FOXO Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Evolent Health and FOXO Technologies

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

The idea behind Evolent Health and FOXO Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.