Correlation Between Hospital Mater and Clover Health

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

By analyzing existing cross correlation between Hospital Mater Dei and Clover Health Investments,, you can compare the effects of market volatilities on Hospital Mater and Clover Health 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 Hospital Mater with a short position of Clover Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and Clover Health.

Diversification Opportunities for Hospital Mater and Clover Health

-0.09

Correlation Coefficient

Hospital Mater  Clover Health

Good diversification

The 3 months correlation between Hospital and Clover is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and Clover Health Investments, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Health Invest and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with Clover Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clover Health Invest has no effect on the direction of Hospital Mater i.e., Hospital Mater and Clover Health go up and down completely randomly.

Pair Corralation between Hospital Mater and Clover Health

Assuming the 90 days trading horizon Hospital Mater Dei is expected to under-perform the Clover Health. But the stock apears to be less risky and, when comparing its historical volatility, Hospital Mater Dei is 1.38 times less risky than Clover Health. The stock trades about -0.07 of its potential returns per unit of risk. The Clover Health Investments, is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,246  in Clover Health Investments, on October 25, 2024 and sell it today you would earn a total of  236.00  from holding Clover Health Investments, or generate 10.51% return on investment over 90 days.

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

Hospital Mater Dei  vs.  Clover Health Investments,

Hospital Mater Dei

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hospital Mater Dei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Clover Health Invest

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clover Health Investments, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Clover Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hospital Mater and Clover Health

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

The idea behind Hospital Mater Dei and Clover Health Investments, 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.