Correlation Between Evolent Health and Axway Software

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

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

Diversification Opportunities for Evolent Health and Axway Software

-0.21

Correlation Coefficient

Evolent Health  Axway Software

Very good diversification

The 3 months correlation between Evolent and Axway is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA 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 Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of Evolent Health i.e., Evolent Health and Axway Software go up and down completely randomly.

Pair Corralation between Evolent Health and Axway Software

Assuming the 90 days horizon Evolent Health is expected to under-perform the Axway Software. In addition to that, Evolent Health is 2.21 times more volatile than Axway Software SA. It trades about -0.03 of its total potential returns per unit of risk. Axway Software SA is currently generating about 0.08 per unit of volatility. If you would invest  2,160  in Axway Software SA on April 11, 2025 and sell it today you would earn a total of  1,770  from holding Axway Software SA or generate 81.94% return on investment over 90 days.

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

Evolent Health  vs.  Axway Software SA

Evolent Health

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolent Health are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evolent Health reported solid returns over the last few months and may actually be approaching a breakup point.

Axway Software SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axway Software SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Axway Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolent Health and Axway Software

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

The idea behind Evolent Health and Axway Software SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.