Correlation Between Clover Health and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Clover Health and Annaly Capital 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 Annaly Capital 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 Annaly Capital Management,, you can compare the effects of market volatilities on Clover Health and Annaly Capital 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 Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Annaly Capital.
Diversification Opportunities for Clover Health and Annaly Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clover and Annaly is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Annaly Capital Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Manag 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 Annaly Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annaly Capital Manag has no effect on the direction of Clover Health i.e., Clover Health and Annaly Capital go up and down completely randomly.
Pair Corralation between Clover Health and Annaly Capital
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 3.27 times more return on investment than Annaly Capital. However, Clover Health is 3.27 times more volatile than Annaly Capital Management,. It trades about 0.25 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.12 per unit of risk. If you would invest 2,035 in Clover Health Investments, on November 5, 2024 and sell it today you would earn a total of 443.00 from holding Clover Health Investments, or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clover Health Investments, vs. Annaly Capital Management,
Performance |
| Timeline |
| Clover Health Invest |
| Annaly Capital Manag |
Clover Health and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Annaly Capital
The main advantage of trading using opposite Clover Health and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Annaly Capital 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 Annaly Capital will offset losses from the drop in Annaly Capital's long position.| Clover Health vs. Taiwan Semiconductor Manufacturing | Clover Health vs. Apple Inc | Clover Health vs. Alibaba Group Holding | Clover Health vs. Microsoft |
| Annaly Capital vs. HCA Healthcare, | Annaly Capital vs. Hospital Mater Dei | Annaly Capital vs. CM Hospitalar SA | Annaly Capital vs. Tyson Foods |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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