Correlation Between AGNC INVESTMENT and CLOVER HEALTH
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT and CLOVER 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 AGNC INVESTMENT and CLOVER HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and CLOVER HEALTH INV, you can compare the effects of market volatilities on AGNC INVESTMENT and CLOVER 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 AGNC INVESTMENT with a short position of CLOVER HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and CLOVER HEALTH.
Diversification Opportunities for AGNC INVESTMENT and CLOVER HEALTH
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGNC and CLOVER is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and CLOVER HEALTH INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLOVER HEALTH INV and AGNC INVESTMENT 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 AGNC INVESTMENT are associated (or correlated) with CLOVER HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLOVER HEALTH INV has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and CLOVER HEALTH go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and CLOVER HEALTH
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 7.23 times less return on investment than CLOVER HEALTH. But when comparing it to its historical volatility, AGNC INVESTMENT is 4.76 times less risky than CLOVER HEALTH. It trades about 0.07 of its potential returns per unit of risk. CLOVER HEALTH INV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 87.00 in CLOVER HEALTH INV on December 12, 2024 and sell it today you would earn a total of 234.00 from holding CLOVER HEALTH INV or generate 268.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC INVESTMENT vs. CLOVER HEALTH INV
Performance |
| Timeline |
| AGNC INVESTMENT |
| CLOVER HEALTH INV |
AGNC INVESTMENT and CLOVER HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and CLOVER HEALTH
The main advantage of trading using opposite AGNC INVESTMENT and CLOVER HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT position performs unexpectedly, CLOVER 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 CLOVER HEALTH will offset losses from the drop in CLOVER HEALTH's long position.| AGNC INVESTMENT vs. Alibaba Health Information | ||
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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