Correlation Between Clover Health and Check Point
Can any of the company-specific risk be diversified away by investing in both Clover Health and Check Point 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 Check Point 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 Check Point Software, you can compare the effects of market volatilities on Clover Health and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Check Point.
Diversification Opportunities for Clover Health and Check Point
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clover and Check is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Clover Health i.e., Clover Health and Check Point go up and down completely randomly.
Pair Corralation between Clover Health and Check Point
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 4.37 times more return on investment than Check Point. However, Clover Health is 4.37 times more volatile than Check Point Software. It trades about 0.19 of its potential returns per unit of risk. Check Point Software is currently generating about 0.1 per unit of risk. If you would invest 1,934 in Clover Health Investments, on October 11, 2024 and sell it today you would earn a total of 220.00 from holding Clover Health Investments, or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clover Health Investments, vs. Check Point Software
Performance |
| Timeline |
| Clover Health Invest |
| Check Point Software |
Clover Health and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Check Point
The main advantage of trading using opposite Clover Health and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Clover Health vs. Melco Resorts Entertainment | Clover Health vs. DENTSPLY SIRONA | Clover Health vs. Global X Funds | Clover Health vs. The Home Depot |
| Check Point vs. Eastman Chemical | Check Point vs. Truist Financial | Check Point vs. LPL Financial Holdings | Check Point vs. Sumitomo Mitsui Financial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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