Correlation Between CLOVER HEALTH and NEW PACIFIC
Can any of the company-specific risk be diversified away by investing in both CLOVER HEALTH and NEW PACIFIC 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 CLOVER HEALTH and NEW PACIFIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLOVER HEALTH INV and NEW PACIFIC METALS, you can compare the effects of market volatilities on CLOVER HEALTH and NEW PACIFIC 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 CLOVER HEALTH with a short position of NEW PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLOVER HEALTH and NEW PACIFIC.
Diversification Opportunities for CLOVER HEALTH and NEW PACIFIC
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CLOVER and NEW is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CLOVER HEALTH INV and NEW PACIFIC METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW PACIFIC METALS and CLOVER 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 CLOVER HEALTH INV are associated (or correlated) with NEW PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW PACIFIC METALS has no effect on the direction of CLOVER HEALTH i.e., CLOVER HEALTH and NEW PACIFIC go up and down completely randomly.
Pair Corralation between CLOVER HEALTH and NEW PACIFIC
Assuming the 90 days horizon CLOVER HEALTH INV is expected to generate 1.22 times more return on investment than NEW PACIFIC. However, CLOVER HEALTH is 1.22 times more volatile than NEW PACIFIC METALS. It trades about 0.07 of its potential returns per unit of risk. NEW PACIFIC METALS is currently generating about -0.01 per unit of risk. If you would invest 107.00 in CLOVER HEALTH INV on October 11, 2024 and sell it today you would earn a total of 212.00 from holding CLOVER HEALTH INV or generate 198.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLOVER HEALTH INV vs. NEW PACIFIC METALS
Performance |
| Timeline |
| CLOVER HEALTH INV |
| NEW PACIFIC METALS |
CLOVER HEALTH and NEW PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLOVER HEALTH and NEW PACIFIC
The main advantage of trading using opposite CLOVER HEALTH and NEW PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLOVER HEALTH position performs unexpectedly, NEW PACIFIC 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 NEW PACIFIC will offset losses from the drop in NEW PACIFIC's long position.| CLOVER HEALTH vs. Superior Plus Corp | CLOVER HEALTH vs. NMI Holdings | CLOVER HEALTH vs. SIVERS SEMICONDUCTORS AB | CLOVER HEALTH vs. Talanx AG |
| NEW PACIFIC vs. FEMALE HEALTH | NEW PACIFIC vs. Wenzhou Kangning Hospital | NEW PACIFIC vs. WESANA HEALTH HOLD | NEW PACIFIC vs. CLOVER HEALTH INV |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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