Correlation Between Clover Health and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Clover Health and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Clover Health and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Westinghouse Air.
Diversification Opportunities for Clover Health and Westinghouse Air
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clover and Westinghouse is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Clover Health i.e., Clover Health and Westinghouse Air go up and down completely randomly.
Pair Corralation between Clover Health and Westinghouse Air
Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 3.82 times more return on investment than Westinghouse Air. However, Clover Health is 3.82 times more volatile than Westinghouse Air Brake. It trades about 0.09 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.13 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 | 99.8% |
| Values | Daily Returns |
Clover Health Investments, vs. Westinghouse Air Brake
Performance |
| Timeline |
| Clover Health Invest |
| Westinghouse Air Brake |
Clover Health and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clover Health and Westinghouse Air
The main advantage of trading using opposite Clover Health and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's 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 |
| Westinghouse Air vs. STMicroelectronics NV | Westinghouse Air vs. DXC Technology | Westinghouse Air vs. Spotify Technology SA | Westinghouse Air vs. Take Two Interactive Software |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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