Correlation Between Clover Health and GX AI

Can any of the company-specific risk be diversified away by investing in both Clover Health and GX AI 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 GX AI 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 GX AI TECH, you can compare the effects of market volatilities on Clover Health and GX AI 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 GX AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and GX AI.

Diversification Opportunities for Clover Health and GX AI

0.25

Correlation Coefficient

Clover Health  GX AI

Modest diversification

The 3 months correlation between Clover and BAIQ39 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and GX AI TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GX AI TECH 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 GX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GX AI TECH has no effect on the direction of Clover Health i.e., Clover Health and GX AI go up and down completely randomly.

Pair Corralation between Clover Health and GX AI

Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 1.33 times more return on investment than GX AI. However, Clover Health is 1.33 times more volatile than GX AI TECH. It trades about 0.04 of its potential returns per unit of risk. GX AI TECH is currently generating about -0.06 per unit of risk. If you would invest  2,004  in Clover Health Investments, on December 23, 2024 and sell it today you would earn a total of  86.00  from holding Clover Health Investments, or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Clover Health Investments,  vs.  GX AI TECH

Clover Health Invest

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clover Health Investments, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Clover Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GX AI TECH

Risk-Adjusted Performance

Very Weak

Over the last 90 days GX AI TECH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Clover Health and GX AI

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

The idea behind Clover Health Investments, and GX AI TECH 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.