Correlation Between Aluminumof China and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Cardinal Health, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Cardinal Health.
Diversification Opportunities for Aluminumof China and Cardinal Health
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aluminumof and Cardinal is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Cardinal Health go up and down completely randomly.
Pair Corralation between Aluminumof China and Cardinal Health
If you would invest 56.00 in Aluminum of on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Aluminum of or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Aluminum of vs. Cardinal Health
Performance |
| Timeline |
| Aluminumof China |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Cardinal Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Aluminumof China and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Cardinal Health
The main advantage of trading using opposite Aluminumof China and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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.| Aluminumof China vs. SCANSOURCE | Aluminumof China vs. CITY OFFICE REIT | Aluminumof China vs. Tencent Music Entertainment | Aluminumof China vs. ZINC MEDIA GR |
| Cardinal Health vs. Singapore Telecommunications Limited | Cardinal Health vs. BW OFFSHORE LTD | Cardinal Health vs. Computer And Technologies | Cardinal Health vs. HEMISPHERE EGY |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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