Correlation Between Cardinal Health and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Alfa Financial 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 Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Alfa Financial Software, you can compare the effects of market volatilities on Cardinal Health and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Alfa Financial.
Diversification Opportunities for Cardinal Health and Alfa Financial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and Alfa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Cardinal Health i.e., Cardinal Health and Alfa Financial go up and down completely randomly.
Pair Corralation between Cardinal Health and Alfa Financial
Assuming the 90 days trading horizon Cardinal Health is expected to generate 1.26 times less return on investment than Alfa Financial. But when comparing it to its historical volatility, Cardinal Health is 1.63 times less risky than Alfa Financial. It trades about 0.13 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16,653 in Alfa Financial Software on August 28, 2024 and sell it today you would earn a total of 5,047 from holding Alfa Financial Software or generate 30.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Cardinal Health vs. Alfa Financial Software
Performance |
| Timeline |
| Cardinal Health |
| Alfa Financial Software |
Cardinal Health and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Alfa Financial
The main advantage of trading using opposite Cardinal Health and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Cardinal Health vs. Sabre Insurance Group | Cardinal Health vs. Cairo Communication SpA | Cardinal Health vs. Deltex Medical Group | Cardinal Health vs. UNIQA Insurance Group |
| Alfa Financial vs. Uniper SE | Alfa Financial vs. London Security Plc | Alfa Financial vs. SURETRACK MON | Alfa Financial vs. Ikigai Ventures |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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