Correlation Between Cardinal Health and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Elmos Semiconductor 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 Elmos Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Elmos Semiconductor SE, you can compare the effects of market volatilities on Cardinal Health and Elmos Semiconductor 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 Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Elmos Semiconductor.
Diversification Opportunities for Cardinal Health and Elmos Semiconductor
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cardinal and Elmos is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Cardinal Health i.e., Cardinal Health and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between Cardinal Health and Elmos Semiconductor
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.44 times more return on investment than Elmos Semiconductor. However, Cardinal Health is 2.29 times less risky than Elmos Semiconductor. It trades about 0.22 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.12 per unit of risk. If you would invest 12,005 in Cardinal Health on November 6, 2024 and sell it today you would earn a total of 566.00 from holding Cardinal Health or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Elmos Semiconductor SE
Performance |
| Timeline |
| Cardinal Health |
| Elmos Semiconductor |
Cardinal Health and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Elmos Semiconductor
The main advantage of trading using opposite Cardinal Health and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor's long position.| Cardinal Health vs. Jacquet Metal Service | Cardinal Health vs. Cornish Metals | Cardinal Health vs. Applied Materials | Cardinal Health vs. Tata Steel Limited |
| Elmos Semiconductor vs. BlackRock Frontiers Investment | Elmos Semiconductor vs. Ruffer Investment | Elmos Semiconductor vs. Diversified Energy | Elmos Semiconductor vs. Virgin Wines UK |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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