Correlation Between Clover Health and Ares Management
Can any of the company-specific risk be diversified away by investing in both Clover Health and Ares Management 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 Ares Management 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 Ares Management, you can compare the effects of market volatilities on Clover Health and Ares Management 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 Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Ares Management.
Diversification Opportunities for Clover Health and Ares Management
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clover and Ares is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Ares Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management 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 Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management has no effect on the direction of Clover Health i.e., Clover Health and Ares Management go up and down completely randomly.
Pair Corralation between Clover Health and Ares Management
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 2.82 times more return on investment than Ares Management. However, Clover Health is 2.82 times more volatile than Ares Management. It trades about 0.09 of its potential returns per unit of risk. Ares Management is currently generating about 0.13 per unit of risk. 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 |
Clover Health Investments, vs. Ares Management
Performance |
| Timeline |
| Clover Health Invest |
| Ares Management |
Clover Health and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Ares Management
The main advantage of trading using opposite Clover Health and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.| Clover Health vs. United Airlines Holdings | Clover Health vs. Hormel Foods | Clover Health vs. United Natural Foods, | Clover Health vs. Tyson Foods |
| Ares Management vs. Verizon Communications | Ares Management vs. Bemobi Mobile Tech | Ares Management vs. Take Two Interactive Software | Ares Management vs. Guidewire Software, |
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 CEOs Directory module to screen CEOs from public companies around the world.
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