Correlation Between Clover Health and Melco Resorts
Can any of the company-specific risk be diversified away by investing in both Clover Health and Melco Resorts 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 Melco Resorts 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 Melco Resorts Entertainment, you can compare the effects of market volatilities on Clover Health and Melco Resorts 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 Melco Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Melco Resorts.
Diversification Opportunities for Clover Health and Melco Resorts
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clover and Melco is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Melco Resorts Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melco Resorts Entert 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 Melco Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melco Resorts Entert has no effect on the direction of Clover Health i.e., Clover Health and Melco Resorts go up and down completely randomly.
Pair Corralation between Clover Health and Melco Resorts
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 1.55 times more return on investment than Melco Resorts. However, Clover Health is 1.55 times more volatile than Melco Resorts Entertainment. It trades about 0.09 of its potential returns per unit of risk. Melco Resorts Entertainment is currently generating about -0.03 per unit of risk. If you would invest 647.00 in Clover Health Investments, on October 27, 2024 and sell it today you would earn a total of 2,212 from holding Clover Health Investments, or generate 341.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clover Health Investments, vs. Melco Resorts Entertainment
Performance |
| Timeline |
| Clover Health Invest |
| Melco Resorts Entert |
Clover Health and Melco Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Melco Resorts
The main advantage of trading using opposite Clover Health and Melco Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Melco Resorts 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 Melco Resorts will offset losses from the drop in Melco Resorts' long position.| Clover Health vs. Hospital Mater Dei | Clover Health vs. Medical Properties Trust, | Clover Health vs. Globus Medical, | Clover Health vs. Ryanair Holdings plc |
| Melco Resorts vs. Raytheon Technologies | Melco Resorts vs. GX AI TECH | Melco Resorts vs. Ryanair Holdings plc | Melco Resorts vs. Agilent Technologies |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |