Correlation Between Clover Health and Burlington Stores,

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

By analyzing existing cross correlation between Clover Health Investments, and Burlington Stores,, you can compare the effects of market volatilities on Clover Health and Burlington Stores, 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 Burlington Stores,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and Burlington Stores,.

Diversification Opportunities for Clover Health and Burlington Stores,

-0.6

Correlation Coefficient

Clover Health  Burlington Stores,

Excellent diversification

The 3 months correlation between Clover and Burlington is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and Burlington Stores, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores, 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 Investments, are associated (or correlated) with Burlington Stores,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores, has no effect on the direction of Clover Health i.e., Clover Health and Burlington Stores, go up and down completely randomly.

Pair Corralation between Clover Health and Burlington Stores,

Assuming the 90 days trading horizon Clover Health is expected to generate 8.94 times less return on investment than Burlington Stores,. In addition to that, Clover Health is 1.55 times more volatile than Burlington Stores,. It trades about 0.01 of its total potential returns per unit of risk. Burlington Stores, is currently generating about 0.14 per unit of volatility. If you would invest  4,966  in Burlington Stores, on October 6, 2024 and sell it today you would earn a total of  950.00  from holding Burlington Stores, or generate 19.13% return on investment over 90 days.

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

Clover Health Investments,  vs.  Burlington Stores,

Clover Health Invest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clover Health Investments, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Clover Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Burlington Stores,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Burlington Stores, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clover Health and Burlington Stores,

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

The idea behind Clover Health Investments, and Burlington Stores, 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.