Correlation Between Cardinal Health and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Cornish Metals 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 Cornish Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Cornish Metals, you can compare the effects of market volatilities on Cardinal Health and Cornish Metals 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Cornish Metals.
Diversification Opportunities for Cardinal Health and Cornish Metals
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cardinal and Cornish is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Cardinal Health i.e., Cardinal Health and Cornish Metals go up and down completely randomly.
Pair Corralation between Cardinal Health and Cornish Metals
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.52 times more return on investment than Cornish Metals. However, Cardinal Health is 1.94 times less risky than Cornish Metals. It trades about 0.44 of its potential returns per unit of risk. Cornish Metals is currently generating about 0.21 per unit of risk. If you would invest 11,725 in Cardinal Health on October 22, 2024 and sell it today you would earn a total of 944.00 from holding Cardinal Health or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cardinal Health vs. Cornish Metals
Performance |
| Timeline |
| Cardinal Health |
| Cornish Metals |
Cardinal Health and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Cornish Metals
The main advantage of trading using opposite Cardinal Health and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Cardinal Health vs. Charter Communications Cl | Cardinal Health vs. Spirent Communications plc | Cardinal Health vs. Gamma Communications PLC | Cardinal Health vs. Blackstone Loan Financing |
| Cornish Metals vs. Atalaya Mining | Cornish Metals vs. Coeur Mining | Cornish Metals vs. Bisichi Mining PLC | Cornish Metals vs. Europa Metals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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