Correlation Between Cardinal Health and Global Gas
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Global Gas 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 Global Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Global Gas, you can compare the effects of market volatilities on Cardinal Health and Global Gas 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 Global Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Global Gas.
Diversification Opportunities for Cardinal Health and Global Gas
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Global is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Global Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gas 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 Global Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gas has no effect on the direction of Cardinal Health i.e., Cardinal Health and Global Gas go up and down completely randomly.
Pair Corralation between Cardinal Health and Global Gas
If you would invest 41.00 in Global Gas on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Global Gas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Cardinal Health vs. Global Gas
Performance |
| Timeline |
| Cardinal Health |
| Global Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cardinal Health and Global Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Global Gas
The main advantage of trading using opposite Cardinal Health and Global Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Global Gas 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 Global Gas will offset losses from the drop in Global Gas' long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Global Gas vs. Cardinal Health | Global Gas vs. Tandy Leather Factory | Global Gas vs. Aquestive Therapeutics | Global Gas vs. Under Armour C |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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