Correlation Between Annaly Capital and Clover Health
Can any of the company-specific risk be diversified away by investing in both Annaly Capital 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 Annaly Capital and Clover Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Annaly Capital Management, and Clover Health Investments,, you can compare the effects of market volatilities on Annaly Capital 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 Annaly Capital with a short position of Clover Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annaly Capital and Clover Health.
Diversification Opportunities for Annaly Capital and Clover Health
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Annaly and Clover is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Annaly Capital Management, and Clover Health Investments, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Health Invest and Annaly Capital 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 Annaly Capital Management, 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 Invest has no effect on the direction of Annaly Capital i.e., Annaly Capital and Clover Health go up and down completely randomly.
Pair Corralation between Annaly Capital and Clover Health
Assuming the 90 days trading horizon Annaly Capital is expected to generate 6.85 times less return on investment than Clover Health. But when comparing it to its historical volatility, Annaly Capital Management, is 3.27 times less risky than Clover Health. It trades about 0.12 of its potential returns per unit of risk. Clover Health Investments, is currently generating about 0.25 of returns per unit of risk over similar time horizon. 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 |
Annaly Capital Management, vs. Clover Health Investments,
Performance |
| Timeline |
| Annaly Capital Manag |
| Clover Health Invest |
Annaly Capital and Clover Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Annaly Capital and Clover Health
The main advantage of trading using opposite Annaly Capital and Clover Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annaly Capital 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.| Annaly Capital vs. HCA Healthcare, | Annaly Capital vs. Hospital Mater Dei | Annaly Capital vs. CM Hospitalar SA | Annaly Capital vs. Tyson Foods |
| Clover Health vs. Taiwan Semiconductor Manufacturing | Clover Health vs. Apple Inc | Clover Health vs. Alibaba Group Holding | Clover Health vs. Microsoft |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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