Correlation Between Cardinal Health and Fastly
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Fastly 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 Cardinal Health and Fastly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Fastly Inc Cl, you can compare the effects of market volatilities on Cardinal Health and Fastly 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 Cardinal Health with a short position of Fastly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Fastly.
Diversification Opportunities for Cardinal Health and Fastly
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and Fastly is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Fastly Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastly Inc Cl and Cardinal 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 Cardinal Health are associated (or correlated) with Fastly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastly Inc Cl has no effect on the direction of Cardinal Health i.e., Cardinal Health and Fastly go up and down completely randomly.
Pair Corralation between Cardinal Health and Fastly
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.3 times more return on investment than Fastly. However, Cardinal Health is 3.35 times less risky than Fastly. It trades about 0.06 of its potential returns per unit of risk. Fastly Inc Cl is currently generating about -0.02 per unit of risk. If you would invest 9,954 in Cardinal Health on September 14, 2024 and sell it today you would earn a total of 1,872 from holding Cardinal Health or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
Cardinal Health vs. Fastly Inc Cl
Performance |
| Timeline |
| Cardinal Health |
| Fastly Inc Cl |
Cardinal Health and Fastly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Fastly
The main advantage of trading using opposite Cardinal Health and Fastly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Fastly 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 Fastly will offset losses from the drop in Fastly's long position.| Cardinal Health vs. Schroders Investment Trusts | Cardinal Health vs. Samsung Electronics Co | Cardinal Health vs. Various Eateries PLC | Cardinal Health vs. Electronic Arts |
| Fastly vs. Samsung Electronics Co | Fastly vs. Samsung Electronics Co | Fastly vs. Hyundai Motor | Fastly vs. Reliance Industries Ltd |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |