Correlation Between Clover Health and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Clover Health and Occidental Petroleum 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 Occidental Petroleum 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 Occidental Petroleum, you can compare the effects of market volatilities on Clover Health and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Occidental Petroleum.
Diversification Opportunities for Clover Health and Occidental Petroleum
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Clover and Occidental is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Clover Health i.e., Clover Health and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Clover Health and Occidental Petroleum
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 1.75 times more return on investment than Occidental Petroleum. However, Clover Health is 1.75 times more volatile than Occidental Petroleum. It trades about 0.27 of its potential returns per unit of risk. Occidental Petroleum is currently generating about -0.23 per unit of risk. If you would invest 2,035 in Clover Health Investments, on November 7, 2024 and sell it today you would earn a total of 494.00 from holding Clover Health Investments, or generate 24.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clover Health Investments, vs. Occidental Petroleum
Performance |
| Timeline |
| Clover Health Invest |
| Occidental Petroleum |
Clover Health and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Occidental Petroleum
The main advantage of trading using opposite Clover Health and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| Clover Health vs. Taiwan Semiconductor Manufacturing | Clover Health vs. Apple Inc | Clover Health vs. Alibaba Group Holding | Clover Health vs. Microsoft |
| Occidental Petroleum vs. United States Steel | Occidental Petroleum vs. JB Hunt Transport | Occidental Petroleum vs. Metalrgica Riosulense SA | Occidental Petroleum vs. Beyond Meat |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |