Correlation Between Forian and Evolent Health

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

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

Diversification Opportunities for Forian and Evolent Health

-0.27

Correlation Coefficient

Forian  Evolent Health

Very good diversification

The 3 months correlation between Forian and Evolent is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Forian Inc and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and Forian 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 Forian Inc 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 Forian i.e., Forian and Evolent Health go up and down completely randomly.

Pair Corralation between Forian and Evolent Health

Given the investment horizon of 90 days Forian is expected to generate 1.36 times less return on investment than Evolent Health. But when comparing it to its historical volatility, Forian Inc is 1.19 times less risky than Evolent Health. It trades about 0.01 of its potential returns per unit of risk. Evolent Health is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,056  in Evolent Health on May 4, 2025 and sell it today you would lose (58.00) from holding Evolent Health or give up 5.49% of portfolio value over 90 days.

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

Forian Inc  vs.  Evolent Health

Forian Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forian Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Forian is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Evolent Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolent Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Evolent Health is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Forian and Evolent Health

The main advantage of trading using opposite Forian and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forian 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 Forian Inc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.