Correlation Between Elevance Health and Clover Health
Can any of the company-specific risk be diversified away by investing in both Elevance Health and Clover Health 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 Elevance Health and Clover Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and Clover Health Investments, you can compare the effects of market volatilities on Elevance Health and Clover Health 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 Elevance Health with a short position of Clover Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and Clover Health.
Diversification Opportunities for Elevance Health and Clover Health
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elevance and Clover is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and Clover Health Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Health Investments and Elevance 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 Elevance Health are associated (or correlated) with Clover Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clover Health Investments has no effect on the direction of Elevance Health i.e., Elevance Health and Clover Health go up and down completely randomly.
Pair Corralation between Elevance Health and Clover Health
Considering the 90-day investment horizon Elevance Health is expected to generate 0.32 times more return on investment than Clover Health. However, Elevance Health is 3.17 times less risky than Clover Health. It trades about -0.07 of its potential returns per unit of risk. Clover Health Investments is currently generating about -0.13 per unit of risk. If you would invest 41,726 in Elevance Health on August 28, 2024 and sell it today you would lose (966.00) from holding Elevance Health or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elevance Health vs. Clover Health Investments
Performance |
| Timeline |
| Elevance Health |
| Clover Health Investments |
Elevance Health and Clover Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elevance Health and Clover Health
The main advantage of trading using opposite Elevance Health and Clover Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health position performs unexpectedly, Clover Health 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 Clover Health will offset losses from the drop in Clover Health's long position.| Elevance Health vs. Cigna Corp | Elevance Health vs. UnitedHealth Group Incorporated | Elevance Health vs. Centene Corp | Elevance Health vs. Molina Healthcare |
| Clover Health vs. Skillz Platform | Clover Health vs. BlackBerry | Clover Health vs. Fubotv Inc | Clover Health vs. SNDL Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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