Correlation Between Cardinal Health, and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both Cardinal Health, and Iron Mountain 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 Iron Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health, and Iron Mountain Incorporated, you can compare the effects of market volatilities on Cardinal Health, and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health, and Iron Mountain.
Diversification Opportunities for Cardinal Health, and Iron Mountain
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cardinal and Iron is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health, and Iron Mountain Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Cardinal Health, i.e., Cardinal Health, and Iron Mountain go up and down completely randomly.
Pair Corralation between Cardinal Health, and Iron Mountain
Assuming the 90 days trading horizon Cardinal Health, is expected to generate 0.93 times more return on investment than Iron Mountain. However, Cardinal Health, is 1.08 times less risky than Iron Mountain. It trades about 0.11 of its potential returns per unit of risk. Iron Mountain Incorporated is currently generating about 0.09 per unit of risk. If you would invest 56,515 in Cardinal Health, on October 30, 2024 and sell it today you would earn a total of 16,347 from holding Cardinal Health, or generate 28.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.61% |
| Values | Daily Returns |
Cardinal Health, vs. Iron Mountain Incorporated
Performance |
| Timeline |
| Cardinal Health, |
| Iron Mountain |
Cardinal Health, and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health, and Iron Mountain
The main advantage of trading using opposite Cardinal Health, and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health, position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| Cardinal Health, vs. Globus Medical, | Cardinal Health, vs. Chunghwa Telecom Co, | Cardinal Health, vs. British American Tobacco | Cardinal Health, vs. JB Hunt Transport |
| Iron Mountain vs. Medical Properties Trust, | Iron Mountain vs. ON Semiconductor | Iron Mountain vs. NXP Semiconductors NV | Iron Mountain vs. Check Point Software |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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