Correlation Between Cardinal Health and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and TROPHY GAMES 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 TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and TROPHY GAMES DEV, you can compare the effects of market volatilities on Cardinal Health and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and TROPHY GAMES.
Diversification Opportunities for Cardinal Health and TROPHY GAMES
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and TROPHY is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of Cardinal Health i.e., Cardinal Health and TROPHY GAMES go up and down completely randomly.
Pair Corralation between Cardinal Health and TROPHY GAMES
Assuming the 90 days horizon Cardinal Health is expected to generate 0.49 times more return on investment than TROPHY GAMES. However, Cardinal Health is 2.04 times less risky than TROPHY GAMES. It trades about 0.13 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about 0.02 per unit of risk. If you would invest 8,988 in Cardinal Health on September 1, 2024 and sell it today you would earn a total of 2,582 from holding Cardinal Health or generate 28.73% 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. TROPHY GAMES DEV
Performance |
| Timeline |
| Cardinal Health |
| TROPHY GAMES DEV |
Cardinal Health and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and TROPHY GAMES
The main advantage of trading using opposite Cardinal Health and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| Cardinal Health vs. Shanghai Pharmaceuticals Holding | Cardinal Health vs. Sinopharm Group Co | Cardinal Health vs. Prestige Consumer Healthcare | Cardinal Health vs. MEDIPAL HOLDINGS P |
| TROPHY GAMES vs. Nintendo Co | TROPHY GAMES vs. Sea Limited | TROPHY GAMES vs. Superior Plus Corp | TROPHY GAMES vs. NMI Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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