Correlation Between Clover Health and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Clover Health and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Clover Health and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Ross Stores.
Diversification Opportunities for Clover Health and Ross Stores
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clover and Ross is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Clover Health i.e., Clover Health and Ross Stores go up and down completely randomly.
Pair Corralation between Clover Health and Ross Stores
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 3.08 times more return on investment than Ross Stores. However, Clover Health is 3.08 times more volatile than Ross Stores. It trades about 0.09 of its potential returns per unit of risk. Ross Stores is currently generating about 0.07 per unit of risk. If you would invest 466.00 in Clover Health Investments, on October 11, 2024 and sell it today you would earn a total of 1,688 from holding Clover Health Investments, or generate 362.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.45% |
| Values | Daily Returns |
Clover Health Investments, vs. Ross Stores
Performance |
| Timeline |
| Clover Health Invest |
| Ross Stores |
Clover Health and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Ross Stores
The main advantage of trading using opposite Clover Health and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' 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 |
| Ross Stores vs. Monster Beverage | Ross Stores vs. Align Technology | Ross Stores vs. Check Point Software | Ross Stores vs. Zebra 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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