Correlation Between Cardinal Health and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and THAI BEVERAGE 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 THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and THAI BEVERAGE, you can compare the effects of market volatilities on Cardinal Health and THAI BEVERAGE 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 THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and THAI BEVERAGE.
Diversification Opportunities for Cardinal Health and THAI BEVERAGE
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cardinal and THAI is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE 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 THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of Cardinal Health i.e., Cardinal Health and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Cardinal Health and THAI BEVERAGE
Assuming the 90 days horizon Cardinal Health is expected to generate 2.06 times less return on investment than THAI BEVERAGE. But when comparing it to its historical volatility, Cardinal Health is 2.87 times less risky than THAI BEVERAGE. It trades about 0.08 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 19.00 in THAI BEVERAGE on August 31, 2024 and sell it today you would earn a total of 20.00 from holding THAI BEVERAGE or generate 105.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Cardinal Health vs. THAI BEVERAGE
Performance |
| Timeline |
| Cardinal Health |
| THAI BEVERAGE |
Cardinal Health and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and THAI BEVERAGE
The main advantage of trading using opposite Cardinal Health and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE's long position.| Cardinal Health vs. China Resources Beer | Cardinal Health vs. AIR PRODCHEMICALS | Cardinal Health vs. GOODYEAR T RUBBER | Cardinal Health vs. APPLIED MATERIALS |
| THAI BEVERAGE vs. SCOTT TECHNOLOGY | THAI BEVERAGE vs. X Fab Silicon | THAI BEVERAGE vs. Media and Games | THAI BEVERAGE vs. GAMING FAC SA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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