Correlation Between GoldMining and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both GoldMining and Cardinal 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 GoldMining and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Cardinal Health, you can compare the effects of market volatilities on GoldMining and Cardinal 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 GoldMining with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Cardinal Health.
Diversification Opportunities for GoldMining and Cardinal Health
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GoldMining and Cardinal is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and GoldMining 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 GoldMining are associated (or correlated) with Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of GoldMining i.e., GoldMining and Cardinal Health go up and down completely randomly.
Pair Corralation between GoldMining and Cardinal Health
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Cardinal Health. In addition to that, GoldMining is 2.71 times more volatile than Cardinal Health. It trades about -0.01 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.07 per unit of volatility. If you would invest 7,337 in Cardinal Health on September 24, 2024 and sell it today you would earn a total of 4,492 from holding Cardinal Health or generate 61.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 38.15% |
| Values | Daily Returns |
GoldMining vs. Cardinal Health
Performance |
| Timeline |
| GoldMining |
| Cardinal Health |
GoldMining and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Cardinal Health
The main advantage of trading using opposite GoldMining and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Cardinal 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| GoldMining vs. Uniper SE | GoldMining vs. Mulberry Group PLC | GoldMining vs. London Security Plc | GoldMining vs. Triad Group PLC |
| Cardinal Health vs. GoldMining | Cardinal Health vs. Metals Exploration Plc | Cardinal Health vs. DFS Furniture PLC | Cardinal Health vs. Cornish 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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