Correlation Between CM Hospitalar and Clover Health

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

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

Diversification Opportunities for CM Hospitalar and Clover Health

0.11

Correlation Coefficient

CM Hospitalar  Clover Health

Average diversification

The 3 months correlation between VVEO3 and Clover is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA 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 CM Hospitalar 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 CM Hospitalar SA 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 CM Hospitalar i.e., CM Hospitalar and Clover Health go up and down completely randomly.

Pair Corralation between CM Hospitalar and Clover Health

Assuming the 90 days trading horizon CM Hospitalar is expected to generate 15.22 times less return on investment than Clover Health. In addition to that, CM Hospitalar is 1.39 times more volatile than Clover Health Investments,. It trades about 0.0 of its total potential returns per unit of risk. Clover Health Investments, is currently generating about 0.07 per unit of volatility. 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CM Hospitalar SA  vs.  Clover Health Investments,

CM Hospitalar SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CM Hospitalar SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CM Hospitalar is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the 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 CM Hospitalar and Clover Health

The main advantage of trading using opposite CM Hospitalar and Clover Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar 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 CM Hospitalar SA 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.