Correlation Between Cardinal Health and Trimble
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Trimble 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 Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Trimble, you can compare the effects of market volatilities on Cardinal Health and Trimble 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 Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Trimble.
Diversification Opportunities for Cardinal Health and Trimble
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cardinal and Trimble is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble 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 Trimble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimble has no effect on the direction of Cardinal Health i.e., Cardinal Health and Trimble go up and down completely randomly.
Pair Corralation between Cardinal Health and Trimble
Assuming the 90 days horizon Cardinal Health is expected to generate 0.78 times more return on investment than Trimble. However, Cardinal Health is 1.28 times less risky than Trimble. It trades about 0.09 of its potential returns per unit of risk. Trimble is currently generating about 0.07 per unit of risk. If you would invest 7,642 in Cardinal Health on September 12, 2024 and sell it today you would earn a total of 3,953 from holding Cardinal Health or generate 51.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Trimble
Performance |
| Timeline |
| Cardinal Health |
| Trimble |
Cardinal Health and Trimble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Trimble
The main advantage of trading using opposite Cardinal Health and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Trimble 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 Trimble will offset losses from the drop in Trimble's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Superior Plus Corp | Cardinal Health vs. NMI Holdings | Cardinal Health vs. SIVERS SEMICONDUCTORS AB |
| Trimble vs. Methode Electronics | Trimble vs. ETFS Coffee ETC | Trimble vs. Meiko Electronics Co | Trimble vs. DATAGROUP SE |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |