Correlation Between Cardinal Health and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and AOYAMA TRADING 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 AOYAMA TRADING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and AOYAMA TRADING, you can compare the effects of market volatilities on Cardinal Health and AOYAMA TRADING 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 AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and AOYAMA TRADING.
Diversification Opportunities for Cardinal Health and AOYAMA TRADING
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cardinal and AOYAMA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING 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 AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of Cardinal Health i.e., Cardinal Health and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between Cardinal Health and AOYAMA TRADING
Assuming the 90 days horizon Cardinal Health is expected to generate 4.39 times less return on investment than AOYAMA TRADING. But when comparing it to its historical volatility, Cardinal Health is 2.59 times less risky than AOYAMA TRADING. It trades about 0.11 of its potential returns per unit of risk. AOYAMA TRADING is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 865.00 in AOYAMA TRADING on September 3, 2024 and sell it today you would earn a total of 545.00 from holding AOYAMA TRADING or generate 63.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. AOYAMA TRADING
Performance |
| Timeline |
| Cardinal Health |
| AOYAMA TRADING |
Cardinal Health and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and AOYAMA TRADING
The main advantage of trading using opposite Cardinal Health and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, AOYAMA TRADING 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 AOYAMA TRADING will offset losses from the drop in AOYAMA TRADING's long position.| Cardinal Health vs. AmerisourceBergen | Cardinal Health vs. Superior Plus Corp | Cardinal Health vs. NMI Holdings | Cardinal Health vs. Origin Agritech |
| AOYAMA TRADING vs. CVW CLEANTECH INC | AOYAMA TRADING vs. Brockhaus Capital Management | AOYAMA TRADING vs. SOFI TECHNOLOGIES | AOYAMA TRADING vs. Cardinal Health |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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