Correlation Between Cardinal Health and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on Cardinal Health and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and ESSILORLUXOTTICA.
Diversification Opportunities for Cardinal Health and ESSILORLUXOTTICA
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cardinal and ESSILORLUXOTTICA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON 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 ESSILORLUXOTTICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSILORLUXOTTICA 12ON has no effect on the direction of Cardinal Health i.e., Cardinal Health and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between Cardinal Health and ESSILORLUXOTTICA
Assuming the 90 days horizon Cardinal Health is expected to generate 1.76 times more return on investment than ESSILORLUXOTTICA. However, Cardinal Health is 1.76 times more volatile than ESSILORLUXOTTICA 12ON. It trades about 0.27 of its potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.39 per unit of risk. If you would invest 11,335 in Cardinal Health on October 25, 2024 and sell it today you would earn a total of 830.00 from holding Cardinal Health or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| Cardinal Health |
| ESSILORLUXOTTICA 12ON |
Cardinal Health and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and ESSILORLUXOTTICA
The main advantage of trading using opposite Cardinal Health and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, ESSILORLUXOTTICA 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 ESSILORLUXOTTICA will offset losses from the drop in ESSILORLUXOTTICA's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Shanghai Pharmaceuticals Holding | Cardinal Health vs. Sinopharm Group Co |
| ESSILORLUXOTTICA vs. Tsingtao Brewery | ESSILORLUXOTTICA vs. Air Lease | ESSILORLUXOTTICA vs. ARDAGH METAL PACDL 0001 | ESSILORLUXOTTICA vs. MCEWEN MINING INC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |