Correlation Between Clover Health and L3Harris Technologies,

Can any of the company-specific risk be diversified away by investing in both Clover Health and L3Harris Technologies, 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 L3Harris Technologies, 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 L3Harris Technologies,, you can compare the effects of market volatilities on Clover Health and L3Harris Technologies, 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 L3Harris Technologies,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clover Health and L3Harris Technologies,.

Diversification Opportunities for Clover Health and L3Harris Technologies,

-0.3

Correlation Coefficient

Clover Health  L3Harris Technologies,

Very good diversification

The 3 months correlation between Clover and L3Harris is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clover Health Investments, and L3Harris Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3Harris Technologies, 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 L3Harris Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3Harris Technologies, has no effect on the direction of Clover Health i.e., Clover Health and L3Harris Technologies, go up and down completely randomly.

Pair Corralation between Clover Health and L3Harris Technologies,

Assuming the 90 days trading horizon Clover Health Investments, is expected to generate 2.17 times more return on investment than L3Harris Technologies,. However, Clover Health is 2.17 times more volatile than L3Harris Technologies,. It trades about 0.04 of its potential returns per unit of risk. L3Harris Technologies, is currently generating about -0.07 per unit of risk. If you would invest  2,004  in Clover Health Investments, on December 22, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clover Health Investments,  vs.  L3Harris Technologies,

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.

L3Harris Technologies,

Risk-Adjusted Performance

Very Weak

Over the last 90 days L3Harris Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical 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 L3Harris Technologies,

The main advantage of trading using opposite Clover Health and L3Harris Technologies, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clover Health position performs unexpectedly, L3Harris Technologies, 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 L3Harris Technologies, will offset losses from the drop in L3Harris Technologies,'s long position.

The idea behind Clover Health Investments, and L3Harris Technologies, 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..