Correlation Between Summit Hotel and CLOVER HEALTH

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Summit Hotel 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 Summit Hotel and CLOVER HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Hotel Properties and CLOVER HEALTH INV, you can compare the effects of market volatilities on Summit Hotel 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 Summit Hotel with a short position of CLOVER HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Hotel and CLOVER HEALTH.

Diversification Opportunities for Summit Hotel and CLOVER HEALTH

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Summit and CLOVER is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Summit Hotel Properties and CLOVER HEALTH INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLOVER HEALTH INV and Summit Hotel 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 Summit Hotel Properties 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 INV has no effect on the direction of Summit Hotel i.e., Summit Hotel and CLOVER HEALTH go up and down completely randomly.

Pair Corralation between Summit Hotel and CLOVER HEALTH

Assuming the 90 days horizon Summit Hotel Properties is expected to generate 0.79 times more return on investment than CLOVER HEALTH. However, Summit Hotel Properties is 1.27 times less risky than CLOVER HEALTH. It trades about 0.19 of its potential returns per unit of risk. CLOVER HEALTH INV is currently generating about -0.02 per unit of risk. If you would invest  326.00  in Summit Hotel Properties on April 21, 2025 and sell it today you would earn a total of  124.00  from holding Summit Hotel Properties or generate 38.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Summit Hotel Properties  vs.  CLOVER HEALTH INV

 Performance 
       Timeline  
Summit Hotel Properties 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Summit Hotel Properties are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Summit Hotel reported solid returns over the last few months and may actually be approaching a breakup point.
CLOVER HEALTH INV 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CLOVER HEALTH INV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CLOVER HEALTH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Summit Hotel and CLOVER HEALTH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Summit Hotel and CLOVER HEALTH

The main advantage of trading using opposite Summit Hotel and CLOVER HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Hotel 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 Summit Hotel Properties and CLOVER HEALTH INV 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk