Correlation Between CLOVER HEALTH and Bausch Health
Can any of the company-specific risk be diversified away by investing in both CLOVER HEALTH and Bausch 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 CLOVER HEALTH and Bausch Health 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 Bausch Health Companies, you can compare the effects of market volatilities on CLOVER HEALTH and Bausch 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 CLOVER HEALTH with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLOVER HEALTH and Bausch Health.
Diversification Opportunities for CLOVER HEALTH and Bausch Health
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CLOVER and Bausch is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CLOVER HEALTH INV and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Bausch Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of CLOVER HEALTH i.e., CLOVER HEALTH and Bausch Health go up and down completely randomly.
Pair Corralation between CLOVER HEALTH and Bausch Health
Assuming the 90 days horizon CLOVER HEALTH INV is expected to generate 1.2 times more return on investment than Bausch Health. However, CLOVER HEALTH is 1.2 times more volatile than Bausch Health Companies. It trades about 0.42 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.07 per unit of risk. If you would invest 307.00 in CLOVER HEALTH INV on October 24, 2024 and sell it today you would earn a total of 77.00 from holding CLOVER HEALTH INV or generate 25.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLOVER HEALTH INV vs. Bausch Health Companies
Performance |
| Timeline |
| CLOVER HEALTH INV |
| Bausch Health Companies |
CLOVER HEALTH and Bausch Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLOVER HEALTH and Bausch Health
The main advantage of trading using opposite CLOVER HEALTH and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLOVER HEALTH position performs unexpectedly, Bausch 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 Bausch Health will offset losses from the drop in Bausch Health's long position.| CLOVER HEALTH vs. Pentair plc | CLOVER HEALTH vs. GMO Internet | CLOVER HEALTH vs. Altair Engineering | CLOVER HEALTH vs. SEALED AIR |
| Bausch Health vs. Molina Healthcare | Bausch Health vs. CLOVER HEALTH INV | Bausch Health vs. National Beverage Corp | Bausch Health vs. Cardinal Health |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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