Correlation Between Ares Management and Clover Health
Can any of the company-specific risk be diversified away by investing in both Ares Management 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 Ares Management and Clover Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management and Clover Health Investments,, you can compare the effects of market volatilities on Ares Management 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 Ares Management with a short position of Clover Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Clover Health.
Diversification Opportunities for Ares Management and Clover Health
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and Clover is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and Clover Health Investments, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Health Invest and Ares Management 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 Ares Management 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 Invest has no effect on the direction of Ares Management i.e., Ares Management and Clover Health go up and down completely randomly.
Pair Corralation between Ares Management and Clover Health
Assuming the 90 days trading horizon Ares Management is expected to generate 1.93 times less return on investment than Clover Health. But when comparing it to its historical volatility, Ares Management is 2.82 times less risky than Clover Health. It trades about 0.13 of its potential returns per unit of risk. Clover Health Investments, is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 466.00 in Clover Health Investments, on October 12, 2024 and sell it today you would earn a total of 1,710 from holding Clover Health Investments, or generate 366.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management vs. Clover Health Investments,
Performance |
| Timeline |
| Ares Management |
| Clover Health Invest |
Ares Management and Clover Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Clover Health
The main advantage of trading using opposite Ares Management and Clover Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management 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.| Ares Management vs. Verizon Communications | Ares Management vs. Bemobi Mobile Tech | Ares Management vs. Take Two Interactive Software | Ares Management vs. Guidewire Software, |
| Clover Health vs. United Airlines Holdings | Clover Health vs. Hormel Foods | Clover Health vs. United Natural Foods, | Clover Health vs. Tyson Foods |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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