Correlation Between LIFWZ Old and Evolent Health

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

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

Diversification Opportunities for LIFWZ Old and Evolent Health

0.0

Correlation Coefficient

LIFWZ Old  Evolent Health

Pay attention - limited upside

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

Pair Corralation between LIFWZ Old and Evolent Health

If you would invest (100.00) in LIFWZ Old on December 28, 2024 and sell it today you would earn a total of  100.00  from holding LIFWZ Old 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

LIFWZ Old  vs.  Evolent Health

LIFWZ Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIFWZ Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, LIFWZ Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 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.

Pair Trading with LIFWZ Old and Evolent Health

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

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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 Transaction History module to view history of all your transactions and understand their impact on performance.