Correlation Between Clover Health and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Clover Health and Jefferies Financial 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 Jefferies Financial 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 Jefferies Financial Group, you can compare the effects of market volatilities on Clover Health and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Jefferies Financial.
Diversification Opportunities for Clover Health and Jefferies Financial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clover and Jefferies is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Clover Health i.e., Clover Health and Jefferies Financial go up and down completely randomly.
Pair Corralation between Clover Health and Jefferies Financial
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 1.89 times more return on investment than Jefferies Financial. However, Clover Health is 1.89 times more volatile than Jefferies Financial Group. It trades about 0.08 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.08 per unit of risk. If you would invest 582.00 in Clover Health Investments, on October 16, 2024 and sell it today you would earn a total of 1,698 from holding Clover Health Investments, or generate 291.75% 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. Jefferies Financial Group
Performance |
| Timeline |
| Clover Health Invest |
| Jefferies Financial |
Clover Health and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Jefferies Financial
The main advantage of trading using opposite Clover Health and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.| Clover Health vs. Warner Music Group | Clover Health vs. Elevance Health, | Clover Health vs. Teladoc Health | Clover Health vs. CVS Health |
| Jefferies Financial vs. Clover Health Investments, | Jefferies Financial vs. Pure Storage, | Jefferies Financial vs. Metalrgica Riosulense SA | Jefferies Financial vs. Datadog, |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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