Correlation Between Cardinal Health and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Evolution Gaming 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 Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Evolution Gaming Group, you can compare the effects of market volatilities on Cardinal Health and Evolution Gaming 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 Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Evolution Gaming.
Diversification Opportunities for Cardinal Health and Evolution Gaming
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Evolution is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Cardinal Health i.e., Cardinal Health and Evolution Gaming go up and down completely randomly.
Pair Corralation between Cardinal Health and Evolution Gaming
Considering the 90-day investment horizon Cardinal Health is expected to generate 1.79 times more return on investment than Evolution Gaming. However, Cardinal Health is 1.79 times more volatile than Evolution Gaming Group. It trades about 0.27 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.14 per unit of risk. If you would invest 10,789 in Cardinal Health on August 31, 2024 and sell it today you would earn a total of 1,474 from holding Cardinal Health or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Evolution Gaming Group
Performance |
| Timeline |
| Cardinal Health |
| Evolution Gaming |
Cardinal Health and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Evolution Gaming
The main advantage of trading using opposite Cardinal Health and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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