Correlation Between Cardinal Health and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Abingdon 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 Cardinal Health and Abingdon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Abingdon Health Plc, you can compare the effects of market volatilities on Cardinal Health and Abingdon 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 Cardinal Health with a short position of Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Abingdon Health.
Diversification Opportunities for Cardinal Health and Abingdon Health
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Abingdon is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Cardinal Health i.e., Cardinal Health and Abingdon Health go up and down completely randomly.
Pair Corralation between Cardinal Health and Abingdon Health
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.37 times more return on investment than Abingdon Health. However, Cardinal Health is 2.74 times less risky than Abingdon Health. It trades about 0.07 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about 0.0 per unit of risk. If you would invest 9,042 in Cardinal Health on August 26, 2024 and sell it today you would earn a total of 3,350 from holding Cardinal Health or generate 37.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Cardinal Health vs. Abingdon Health Plc
Performance |
| Timeline |
| Cardinal Health |
| Abingdon Health Plc |
Cardinal Health and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Abingdon Health
The main advantage of trading using opposite Cardinal Health and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Abingdon 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Cardinal Health vs. X FAB Silicon Foundries | Cardinal Health vs. Gamma Communications PLC | Cardinal Health vs. Sabien Technology Group | Cardinal Health vs. Eastman Chemical Co |
| Abingdon Health vs. Admiral Group PLC | Abingdon Health vs. Anglo American PLC | Abingdon Health vs. Vodafone Group PLC | Abingdon Health vs. Caffyns PLC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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