Correlation Between Cardinal Health and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and GEELY AUTOMOBILE, you can compare the effects of market volatilities on Cardinal Health and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and GEELY AUTOMOBILE.
Diversification Opportunities for Cardinal Health and GEELY AUTOMOBILE
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and GEELY is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Cardinal Health i.e., Cardinal Health and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Cardinal Health and GEELY AUTOMOBILE
Assuming the 90 days horizon Cardinal Health is expected to generate 1.18 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, Cardinal Health is 1.72 times less risky than GEELY AUTOMOBILE. It trades about 0.08 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 98.00 in GEELY AUTOMOBILE on October 17, 2024 and sell it today you would earn a total of 76.00 from holding GEELY AUTOMOBILE or generate 77.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Cardinal Health |
| GEELY AUTOMOBILE |
Cardinal Health and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and GEELY AUTOMOBILE
The main advantage of trading using opposite Cardinal Health and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| Cardinal Health vs. Heidelberg Materials AG | Cardinal Health vs. KENEDIX OFFICE INV | Cardinal Health vs. Taylor Morrison Home | Cardinal Health vs. VULCAN MATERIALS |
| GEELY AUTOMOBILE vs. WESANA HEALTH HOLD | GEELY AUTOMOBILE vs. HEALTHSTREAM | GEELY AUTOMOBILE vs. CarsalesCom | GEELY AUTOMOBILE 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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