Correlation Between Alpha Technology and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Alpha Technology 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 Alpha Technology and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Technology Group and Cardinal Health, you can compare the effects of market volatilities on Alpha Technology 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 Alpha Technology with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Technology and Cardinal Health.
Diversification Opportunities for Alpha Technology and Cardinal Health
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alpha and Cardinal is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Technology Group and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Alpha Technology 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 Alpha Technology Group 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 Alpha Technology i.e., Alpha Technology and Cardinal Health go up and down completely randomly.
Pair Corralation between Alpha Technology and Cardinal Health
Given the investment horizon of 90 days Alpha Technology Group is expected to generate 4.25 times more return on investment than Cardinal Health. However, Alpha Technology is 4.25 times more volatile than Cardinal Health. It trades about 0.04 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.13 per unit of risk. If you would invest 1,670 in Alpha Technology Group on November 9, 2024 and sell it today you would earn a total of 25.00 from holding Alpha Technology Group or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Technology Group vs. Cardinal Health
Performance |
| Timeline |
| Alpha Technology |
| Cardinal Health |
Alpha Technology and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Technology and Cardinal Health
The main advantage of trading using opposite Alpha Technology and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Technology 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.| Alpha Technology vs. Singapore Airlines | Alpha Technology vs. CVR Energy | Alpha Technology vs. The Gap, | Alpha Technology vs. American Airlines Group |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |