Correlation Between Cardinal Health and Systemair
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Systemair 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 Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Systemair AB, you can compare the effects of market volatilities on Cardinal Health and Systemair 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 Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Systemair.
Diversification Opportunities for Cardinal Health and Systemair
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cardinal and Systemair is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Cardinal Health i.e., Cardinal Health and Systemair go up and down completely randomly.
Pair Corralation between Cardinal Health and Systemair
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.37 times more return on investment than Systemair. However, Cardinal Health is 2.67 times less risky than Systemair. It trades about 0.29 of its potential returns per unit of risk. Systemair AB is currently generating about -0.07 per unit of risk. If you would invest 11,800 in Cardinal Health on November 3, 2024 and sell it today you would earn a total of 771.00 from holding Cardinal Health or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Systemair AB
Performance |
| Timeline |
| Cardinal Health |
| Systemair AB |
Cardinal Health and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Systemair
The main advantage of trading using opposite Cardinal Health and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Cardinal Health vs. Naked Wines plc | Cardinal Health vs. Datalogic | Cardinal Health vs. Ameriprise Financial | Cardinal Health vs. Fidelity National Information |
| Systemair vs. Vitec Software Group | Systemair vs. Raytheon Technologies Corp | Systemair vs. Sealed Air Corp | Systemair vs. Air Products Chemicals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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