Correlation Between Cardinal Health and X FAB
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and X FAB Silicon Foundries, you can compare the effects of market volatilities on Cardinal Health and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and X FAB.
Diversification Opportunities for Cardinal Health and X FAB
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and 0ROZ is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Cardinal Health i.e., Cardinal Health and X FAB go up and down completely randomly.
Pair Corralation between Cardinal Health and X FAB
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.53 times more return on investment than X FAB. However, Cardinal Health is 1.89 times less risky than X FAB. It trades about 0.13 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.11 per unit of risk. If you would invest 9,790 in Cardinal Health on September 1, 2024 and sell it today you would earn a total of 2,445 from holding Cardinal Health or generate 24.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Cardinal Health |
| X FAB Silicon |
Cardinal Health and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and X FAB
The main advantage of trading using opposite Cardinal Health and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Cardinal Health vs. Uniper SE | Cardinal Health vs. Mulberry Group PLC | Cardinal Health vs. London Security Plc | Cardinal Health vs. Triad Group PLC |
| X FAB vs. Gamma Communications PLC | X FAB vs. Dalata Hotel Group | X FAB vs. Zegona Communications Plc | X FAB vs. Gaztransport et Technigaz |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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