Correlation Between Evolent Health and Autodesk

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

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

Diversification Opportunities for Evolent Health and Autodesk

-0.13

Correlation Coefficient

Evolent Health  Autodesk

Good diversification

The 3 months correlation between Evolent and Autodesk is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk 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 Autodesk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autodesk has no effect on the direction of Evolent Health i.e., Evolent Health and Autodesk go up and down completely randomly.

Pair Corralation between Evolent Health and Autodesk

Assuming the 90 days horizon Evolent Health is expected to generate 2.3 times more return on investment than Autodesk. However, Evolent Health is 2.3 times more volatile than Autodesk. It trades about 0.12 of its potential returns per unit of risk. Autodesk is currently generating about 0.12 per unit of risk. If you would invest  730.00  in Evolent Health on April 21, 2025 and sell it today you would earn a total of  235.00  from holding Evolent Health or generate 32.19% 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.  Autodesk

Evolent Health

Risk-Adjusted Performance

OK

Over the last 90 days Evolent Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Evolent Health reported solid returns over the last few months and may actually be approaching a breakup point.

Autodesk

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Autodesk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolent Health and Autodesk

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

The idea behind Evolent Health and Autodesk 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.