Correlation Between Clover Health and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Clover Health and Banco Santander 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 Banco Santander 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 Banco Santander Chile, you can compare the effects of market volatilities on Clover Health and Banco Santander 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 Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Banco Santander.
Diversification Opportunities for Clover Health and Banco Santander
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clover and Banco is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Banco Santander Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Chile 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 Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander Chile has no effect on the direction of Clover Health i.e., Clover Health and Banco Santander go up and down completely randomly.
Pair Corralation between Clover Health and Banco Santander
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 3.24 times more return on investment than Banco Santander. However, Clover Health is 3.24 times more volatile than Banco Santander Chile. It trades about 0.34 of its potential returns per unit of risk. Banco Santander Chile is currently generating about 0.17 per unit of risk. If you would invest 1,930 in Clover Health Investments, on November 3, 2024 and sell it today you would earn a total of 625.00 from holding Clover Health Investments, or generate 32.38% 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. Banco Santander Chile
Performance |
| Timeline |
| Clover Health Invest |
| Banco Santander Chile |
Clover Health and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Banco Santander
The main advantage of trading using opposite Clover Health and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Clover Health vs. Air Products and | Clover Health vs. Metalrgica Riosulense SA | Clover Health vs. Ryanair Holdings plc | Clover Health vs. Cardinal Health, |
| Banco Santander vs. Warner Music Group | Banco Santander vs. Tyson Foods | Banco Santander vs. Academy Sports and | Banco Santander vs. Apartment Investment and |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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