Correlation Between Cardinal Health and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Abcellera Biologics 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 Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Abcellera Biologics, you can compare the effects of market volatilities on Cardinal Health and Abcellera Biologics 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 Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Abcellera Biologics.
Diversification Opportunities for Cardinal Health and Abcellera Biologics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and Abcellera is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics 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 Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Cardinal Health i.e., Cardinal Health and Abcellera Biologics go up and down completely randomly.
Pair Corralation between Cardinal Health and Abcellera Biologics
Considering the 90-day investment horizon Cardinal Health is expected to under-perform the Abcellera Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Cardinal Health is 2.33 times less risky than Abcellera Biologics. The stock trades about -0.21 of its potential returns per unit of risk. The Abcellera Biologics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 292.00 in Abcellera Biologics on September 14, 2024 and sell it today you would earn a total of 3.00 from holding Abcellera Biologics or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Abcellera Biologics
Performance |
| Timeline |
| Cardinal Health |
| Abcellera Biologics |
Cardinal Health and Abcellera Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Abcellera Biologics
The main advantage of trading using opposite Cardinal Health and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Abcellera Biologics vs. Hepion Pharmaceuticals | Abcellera Biologics vs. Krystal Biotech | Abcellera Biologics vs. CureVac NV | Abcellera Biologics vs. Vir Biotechnology |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |