Correlation Between CARDINAL HEALTH and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both CARDINAL HEALTH and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARDINAL HEALTH and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on CARDINAL HEALTH and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARDINAL HEALTH and TOWNSQUARE MEDIA.
Diversification Opportunities for CARDINAL HEALTH and TOWNSQUARE MEDIA
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between CARDINAL and TOWNSQUARE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC 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 TOWNSQUARE MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWNSQUARE MEDIA INC has no effect on the direction of CARDINAL HEALTH i.e., CARDINAL HEALTH and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between CARDINAL HEALTH and TOWNSQUARE MEDIA
Assuming the 90 days trading horizon CARDINAL HEALTH is expected to generate 0.41 times more return on investment than TOWNSQUARE MEDIA. However, CARDINAL HEALTH is 2.46 times less risky than TOWNSQUARE MEDIA. It trades about 0.2 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about -0.06 per unit of risk. If you would invest 11,434 in CARDINAL HEALTH on October 12, 2024 and sell it today you would earn a total of 396.00 from holding CARDINAL HEALTH or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARDINAL HEALTH vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| CARDINAL HEALTH |
| TOWNSQUARE MEDIA INC |
CARDINAL HEALTH and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARDINAL HEALTH and TOWNSQUARE MEDIA
The main advantage of trading using opposite CARDINAL HEALTH and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARDINAL HEALTH position performs unexpectedly, TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA will offset losses from the drop in TOWNSQUARE MEDIA's long position.| CARDINAL HEALTH vs. Nordic Semiconductor ASA | CARDINAL HEALTH vs. SOCKET MOBILE NEW | CARDINAL HEALTH vs. BE Semiconductor Industries | CARDINAL HEALTH vs. Entravision Communications |
| TOWNSQUARE MEDIA vs. CARDINAL HEALTH | TOWNSQUARE MEDIA vs. Safety Insurance Group | TOWNSQUARE MEDIA vs. Singapore Reinsurance | TOWNSQUARE MEDIA vs. Acadia Healthcare |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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