Correlation Between Cardinal Health and Avinger
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Avinger 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 Avinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Avinger, you can compare the effects of market volatilities on Cardinal Health and Avinger 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 Avinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Avinger.
Diversification Opportunities for Cardinal Health and Avinger
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and Avinger is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Avinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avinger 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 Avinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avinger has no effect on the direction of Cardinal Health i.e., Cardinal Health and Avinger go up and down completely randomly.
Pair Corralation between Cardinal Health and Avinger
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.74 times more return on investment than Avinger. However, Cardinal Health is 1.35 times less risky than Avinger. It trades about 0.2 of its potential returns per unit of risk. Avinger is currently generating about -0.02 per unit of risk. If you would invest 11,087 in Cardinal Health on August 27, 2024 and sell it today you would earn a total of 1,090 from holding Cardinal Health or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Avinger
Performance |
| Timeline |
| Cardinal Health |
| Avinger |
Cardinal Health and Avinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Avinger
The main advantage of trading using opposite Cardinal Health and Avinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Avinger 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 Avinger will offset losses from the drop in Avinger's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Avinger vs. GlucoTrack | Avinger vs. Nexgel Inc | Avinger vs. Sharps Technology | Avinger vs. Innovative Eyewear |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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