Correlation Between SCANSOURCE and Evolent Health

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

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

Diversification Opportunities for SCANSOURCE and Evolent Health

0.01

Correlation Coefficient

SCANSOURCE  Evolent Health

Significant diversification

The 3 months correlation between SCANSOURCE and Evolent is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SCANSOURCE and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and SCANSOURCE 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 SCANSOURCE 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 SCANSOURCE i.e., SCANSOURCE and Evolent Health go up and down completely randomly.

Pair Corralation between SCANSOURCE and Evolent Health

Assuming the 90 days trading horizon SCANSOURCE is expected to generate 1.38 times less return on investment than Evolent Health. But when comparing it to its historical volatility, SCANSOURCE is 2.06 times less risky than Evolent Health. It trades about 0.18 of its potential returns per unit of risk. Evolent Health is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SCANSOURCE  vs.  Evolent Health

SCANSOURCE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCANSOURCE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SCANSOURCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with SCANSOURCE and Evolent Health

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

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.