Correlation Between Cardinal Health and T MOBILE
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and T MOBILE 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 T MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and T MOBILE US, you can compare the effects of market volatilities on Cardinal Health and T MOBILE 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 T MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and T MOBILE.
Diversification Opportunities for Cardinal Health and T MOBILE
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cardinal and TM5 is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and T MOBILE US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE US 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 T MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T MOBILE US has no effect on the direction of Cardinal Health i.e., Cardinal Health and T MOBILE go up and down completely randomly.
Pair Corralation between Cardinal Health and T MOBILE
Assuming the 90 days horizon Cardinal Health is expected to generate 1.7 times less return on investment than T MOBILE. In addition to that, Cardinal Health is 1.67 times more volatile than T MOBILE US. It trades about 0.17 of its total potential returns per unit of risk. T MOBILE US is currently generating about 0.47 per unit of volatility. If you would invest 20,527 in T MOBILE US on September 3, 2024 and sell it today you would earn a total of 2,963 from holding T MOBILE US or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. T MOBILE US
Performance |
| Timeline |
| Cardinal Health |
| T MOBILE US |
Cardinal Health and T MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and T MOBILE
The main advantage of trading using opposite Cardinal Health and T MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, T MOBILE 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 T MOBILE will offset losses from the drop in T MOBILE's long position.| Cardinal Health vs. AmerisourceBergen | Cardinal Health vs. Superior Plus Corp | Cardinal Health vs. NMI Holdings | Cardinal Health vs. Origin Agritech |
| T MOBILE vs. GRIFFIN MINING LTD | T MOBILE vs. Brockhaus Capital Management | T MOBILE vs. Waste Management | T MOBILE 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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