Correlation Between CLOVER HEALTH and Boeing

Can any of the company-specific risk be diversified away by investing in both CLOVER HEALTH and Boeing 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 Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CLOVER HEALTH INV and The Boeing, you can compare the effects of market volatilities on CLOVER HEALTH and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLOVER HEALTH and Boeing.

Diversification Opportunities for CLOVER HEALTH and Boeing

-0.32

Correlation Coefficient

CLOVER HEALTH  Boeing

Very good diversification

The 3 months correlation between CLOVER and Boeing is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CLOVER HEALTH INV and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing 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 INV are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of CLOVER HEALTH i.e., CLOVER HEALTH and Boeing go up and down completely randomly.

Pair Corralation between CLOVER HEALTH and Boeing

Assuming the 90 days horizon CLOVER HEALTH INV is expected to under-perform the Boeing. In addition to that, CLOVER HEALTH is 1.93 times more volatile than The Boeing. It trades about -0.02 of its total potential returns per unit of risk. The Boeing is currently generating about 0.16 per unit of volatility. If you would invest  14,082  in The Boeing on October 8, 2024 and sell it today you would earn a total of  2,672  from holding The Boeing or generate 18.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CLOVER HEALTH INV  vs.  The Boeing

CLOVER HEALTH INV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLOVER HEALTH INV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CLOVER HEALTH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Boeing

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Boeing unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CLOVER HEALTH and Boeing

The main advantage of trading using opposite CLOVER HEALTH and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLOVER HEALTH position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.

The idea behind CLOVER HEALTH INV and The Boeing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.