Correlation Between Apple and Clover Health
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Clover Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Clover Health Investments,, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Clover Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Clover Health.
Diversification Opportunities for Apple and Clover Health
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Clover is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and Clover Health go up and down completely randomly.
Pair Corralation between Apple and Clover Health
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Clover Health. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.79 times less risky than Clover Health. The stock trades about -0.6 of its potential returns per unit of risk. The Clover Health Investments, is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,100 in Clover Health Investments, on October 25, 2024 and sell it today you would earn a total of 382.00 from holding Clover Health Investments, or generate 18.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Clover Health Investments,
Performance |
| Timeline |
| Apple Inc |
| Clover Health Invest |
Apple and Clover Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Clover Health
The main advantage of trading using opposite Apple and Clover Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Vulcan Materials | Apple vs. SVB Financial Group | Apple vs. Synchrony Financial | Apple vs. Brpr Corporate Offices |
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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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