Correlation Between Clover Health and Oscar Health
Can any of the company-specific risk be diversified away by investing in both Clover Health and Oscar 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 Oscar Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clover Health Investments and Oscar Health, you can compare the effects of market volatilities on Clover Health and Oscar 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 Oscar Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Oscar Health.
Diversification Opportunities for Clover Health and Oscar Health
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Clover and Oscar is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments and Oscar Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oscar Health 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 Investments are associated (or correlated) with Oscar Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oscar Health has no effect on the direction of Clover Health i.e., Clover Health and Oscar Health go up and down completely randomly.
Pair Corralation between Clover Health and Oscar Health
Given the investment horizon of 90 days Clover Health Investments is expected to generate 0.92 times more return on investment than Oscar Health. However, Clover Health Investments is 1.08 times less risky than Oscar Health. It trades about 0.15 of its potential returns per unit of risk. Oscar Health is currently generating about -0.21 per unit of risk. If you would invest 408.00 in Clover Health Investments on November 18, 2024 and sell it today you would earn a total of 38.00 from holding Clover Health Investments or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clover Health Investments vs. Oscar Health
Performance |
| Timeline |
| Clover Health Investments |
| Oscar Health |
Clover Health and Oscar Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Oscar Health
The main advantage of trading using opposite Clover Health and Oscar Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Oscar 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 Oscar Health will offset losses from the drop in Oscar Health's long position.| Clover Health vs. Skillz Platform | Clover Health vs. BlackBerry | Clover Health vs. Fubotv Inc | Clover Health vs. SNDL Inc |
| Oscar Health vs. Molina Healthcare | Oscar Health vs. Centene Corp | Oscar Health vs. Elevance Health | Oscar Health vs. Clover Health Investments |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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