Correlation Between Cardinal Health, and Snowflake
Can any of the company-specific risk be diversified away by investing in both Cardinal Health, and Snowflake 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 Snowflake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health, and Snowflake, you can compare the effects of market volatilities on Cardinal Health, and Snowflake 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 Snowflake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health, and Snowflake.
Diversification Opportunities for Cardinal Health, and Snowflake
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cardinal and Snowflake is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health, and Snowflake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowflake 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 Snowflake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snowflake has no effect on the direction of Cardinal Health, i.e., Cardinal Health, and Snowflake go up and down completely randomly.
Pair Corralation between Cardinal Health, and Snowflake
Assuming the 90 days trading horizon Cardinal Health, is expected to generate 1.66 times less return on investment than Snowflake. But when comparing it to its historical volatility, Cardinal Health, is 2.38 times less risky than Snowflake. It trades about 0.16 of its potential returns per unit of risk. Snowflake is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,649 in Snowflake on November 4, 2024 and sell it today you would earn a total of 1,004 from holding Snowflake or generate 60.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health, vs. Snowflake
Performance |
| Timeline |
| Cardinal Health, |
| Snowflake |
Cardinal Health, and Snowflake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health, and Snowflake
The main advantage of trading using opposite Cardinal Health, and Snowflake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health, position performs unexpectedly, Snowflake 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 Snowflake will offset losses from the drop in Snowflake's long position.| Cardinal Health, vs. Taiwan Semiconductor Manufacturing | Cardinal Health, vs. Apple Inc | Cardinal Health, vs. Alibaba Group Holding | Cardinal Health, vs. Microsoft |
| Snowflake vs. Monster Beverage | Snowflake vs. Liberty Broadband | Snowflake vs. Ares Management | Snowflake vs. Brpr Corporate Offices |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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