Correlation Between Evolent Health and Amdocs

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

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

Diversification Opportunities for Evolent Health and Amdocs

-0.46

Correlation Coefficient

Evolent Health  Amdocs

Very good diversification

The 3 months correlation between Evolent and Amdocs is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Evolent Health and Amdocs Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amdocs Limited 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 Amdocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amdocs Limited has no effect on the direction of Evolent Health i.e., Evolent Health and Amdocs go up and down completely randomly.

Pair Corralation between Evolent Health and Amdocs

Assuming the 90 days horizon Evolent Health is expected to generate 4.77 times more return on investment than Amdocs. However, Evolent Health is 4.77 times more volatile than Amdocs Limited. It trades about -0.01 of its potential returns per unit of risk. Amdocs Limited is currently generating about -0.17 per unit of risk. If you would invest  950.00  in Evolent Health on May 9, 2025 and sell it today you would lose (110.00) from holding Evolent Health or give up 11.58% of portfolio value over 90 days.

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

Evolent Health  vs.  Amdocs Limited

Evolent Health

Risk-Adjusted Performance

Weakest

Over the last 90 days Evolent Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Evolent Health is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Amdocs Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days Amdocs Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Evolent Health and Amdocs

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

The idea behind Evolent Health and Amdocs Limited 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.