Correlation Between CLOVER HEALTH and EIDESVIK OFFSHORE

Can any of the company-specific risk be diversified away by investing in both CLOVER HEALTH and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on CLOVER HEALTH and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLOVER HEALTH and EIDESVIK OFFSHORE.

Diversification Opportunities for CLOVER HEALTH and EIDESVIK OFFSHORE

0.16

Correlation Coefficient

CLOVER HEALTH  EIDESVIK OFFSHORE

Average diversification

The 3 months correlation between CLOVER and EIDESVIK is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CLOVER HEALTH INV and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of CLOVER HEALTH i.e., CLOVER HEALTH and EIDESVIK OFFSHORE go up and down completely randomly.

Pair Corralation between CLOVER HEALTH and EIDESVIK OFFSHORE

Assuming the 90 days horizon CLOVER HEALTH INV is expected to generate 1.69 times more return on investment than EIDESVIK OFFSHORE. However, CLOVER HEALTH is 1.69 times more volatile than EIDESVIK OFFSHORE NK. It trades about 0.58 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.09 per unit of risk. If you would invest  307.00  in CLOVER HEALTH INV on October 26, 2024 and sell it today you would earn a total of  128.00  from holding CLOVER HEALTH INV or generate 41.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

CLOVER HEALTH INV  vs.  EIDESVIK OFFSHORE NK

CLOVER HEALTH INV

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CLOVER HEALTH INV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CLOVER HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

EIDESVIK OFFSHORE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CLOVER HEALTH and EIDESVIK OFFSHORE

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

The idea behind CLOVER HEALTH INV and EIDESVIK OFFSHORE NK 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.