Correlation Between Evolent Health and Samsung Electronics

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

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

Diversification Opportunities for Evolent Health and Samsung Electronics

0.49

Correlation Coefficient

Evolent Health  Samsung Electronics

Very weak diversification

The 3 months correlation between Evolent and Samsung is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Evolent Health i.e., Evolent Health and Samsung Electronics go up and down completely randomly.

Pair Corralation between Evolent Health and Samsung Electronics

Assuming the 90 days horizon Evolent Health is expected to generate 2.3 times more return on investment than Samsung Electronics. However, Evolent Health is 2.3 times more volatile than Samsung Electronics Co. It trades about 0.13 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.15 per unit of risk. If you would invest  730.00  in Evolent Health on April 20, 2025 and sell it today you would earn a total of  250.00  from holding Evolent Health or generate 34.25% return on investment over 90 days.

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

Evolent Health  vs.  Samsung Electronics Co

Evolent Health

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolent Health are ranked lower than 9 (%) 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.

Samsung Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Samsung Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolent Health and Samsung Electronics

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

The idea behind Evolent Health and Samsung Electronics Co 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.