Correlation Between Aegon NV and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Aegon NV 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 Aegon NV and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon NV ADR and Cardinal Health, you can compare the effects of market volatilities on Aegon NV 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 Aegon NV with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Cardinal Health.
Diversification Opportunities for Aegon NV and Cardinal Health
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aegon and Cardinal is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Aegon NV 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 Aegon NV ADR 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 Aegon NV i.e., Aegon NV and Cardinal Health go up and down completely randomly.
Pair Corralation between Aegon NV and Cardinal Health
Considering the 90-day investment horizon Aegon NV is expected to generate 1.26 times less return on investment than Cardinal Health. In addition to that, Aegon NV is 1.2 times more volatile than Cardinal Health. It trades about 0.05 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.08 per unit of volatility. If you would invest 7,494 in Cardinal Health on September 3, 2024 and sell it today you would earn a total of 4,753 from holding Cardinal Health or generate 63.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Cardinal Health
Performance |
| Timeline |
| Aegon NV ADR |
| Cardinal Health |
Aegon NV and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Cardinal Health
The main advantage of trading using opposite Aegon NV and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV 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.| Aegon NV vs. Global Indemnity PLC | Aegon NV vs. Erie Indemnity | Aegon NV vs. AMERISAFE | Aegon NV vs. Diamond Hill Investment |
| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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