Correlation Between First American and CLOVER HEALTH
Can any of the company-specific risk be diversified away by investing in both First American 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 First American and CLOVER HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Financial and CLOVER HEALTH INV, you can compare the effects of market volatilities on First American 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 First American with a short position of CLOVER HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and CLOVER HEALTH.
Diversification Opportunities for First American and CLOVER HEALTH
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and CLOVER is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding First American Financial and CLOVER HEALTH INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLOVER HEALTH INV and First American 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 First American Financial 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 INV has no effect on the direction of First American i.e., First American and CLOVER HEALTH go up and down completely randomly.
Pair Corralation between First American and CLOVER HEALTH
Assuming the 90 days horizon First American is expected to generate 18.24 times less return on investment than CLOVER HEALTH. But when comparing it to its historical volatility, First American Financial is 1.8 times less risky than CLOVER HEALTH. It trades about 0.05 of its potential returns per unit of risk. CLOVER HEALTH INV is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 300.00 in CLOVER HEALTH INV on November 4, 2024 and sell it today you would earn a total of 119.00 from holding CLOVER HEALTH INV or generate 39.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First American Financial vs. CLOVER HEALTH INV
Performance |
| Timeline |
| First American Financial |
| CLOVER HEALTH INV |
First American and CLOVER HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and CLOVER HEALTH
The main advantage of trading using opposite First American and CLOVER HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American 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.| First American vs. Beta Systems Software | First American vs. Nucletron Electronic Aktiengesellschaft | First American vs. VITEC SOFTWARE GROUP | First American vs. CyberArk Software |
| CLOVER HEALTH vs. AGNC INVESTMENT | CLOVER HEALTH vs. RYU Apparel | CLOVER HEALTH vs. Guangdong Investment Limited | CLOVER HEALTH vs. CDL INVESTMENT |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |