Correlation Between Cardinal Health and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Gaztransport Technigaz 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 Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Cardinal Health and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Gaztransport Technigaz.
Diversification Opportunities for Cardinal Health and Gaztransport Technigaz
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and Gaztransport is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Cardinal Health i.e., Cardinal Health and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Cardinal Health and Gaztransport Technigaz
Assuming the 90 days horizon Cardinal Health is expected to generate 0.89 times more return on investment than Gaztransport Technigaz. However, Cardinal Health is 1.12 times less risky than Gaztransport Technigaz. It trades about 0.09 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.06 per unit of risk. If you would invest 7,625 in Cardinal Health on October 16, 2024 and sell it today you would earn a total of 4,040 from holding Cardinal Health or generate 52.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Cardinal Health |
| Gaztransport Technigaz |
Cardinal Health and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Gaztransport Technigaz
The main advantage of trading using opposite Cardinal Health and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Cardinal Health vs. Khiron Life Sciences | Cardinal Health vs. AEON STORES | Cardinal Health vs. Burlington Stores | Cardinal Health vs. H2O Retailing |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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