Correlation Between Cardinal Health and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Canon Marketing 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 Canon Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Canon Marketing Japan, you can compare the effects of market volatilities on Cardinal Health and Canon Marketing 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 Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Canon Marketing.
Diversification Opportunities for Cardinal Health and Canon Marketing
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cardinal and Canon is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan 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 Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of Cardinal Health i.e., Cardinal Health and Canon Marketing go up and down completely randomly.
Pair Corralation between Cardinal Health and Canon Marketing
Assuming the 90 days horizon Cardinal Health is expected to generate 1.18 times more return on investment than Canon Marketing. However, Cardinal Health is 1.18 times more volatile than Canon Marketing Japan. It trades about 0.1 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.11 per unit of risk. If you would invest 11,583 in Cardinal Health on November 3, 2024 and sell it today you would earn a total of 657.00 from holding Cardinal Health or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Canon Marketing Japan
Performance |
| Timeline |
| Cardinal Health |
| Canon Marketing Japan |
Cardinal Health and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Canon Marketing
The main advantage of trading using opposite Cardinal Health and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Canon Marketing 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 Canon Marketing will offset losses from the drop in Canon Marketing's long position.| Cardinal Health vs. Beta Systems Software | Cardinal Health vs. UNITED UTILITIES GR | Cardinal Health vs. NORTHEAST UTILITIES | Cardinal Health vs. PSI Software AG |
| Canon Marketing vs. AIR PRODCHEMICALS | Canon Marketing vs. BW OFFSHORE LTD | Canon Marketing vs. ANGANG STEEL H | Canon Marketing vs. KOBE STEEL LTD |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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