Correlation Between CARDINAL HEALTH and OPERA SOFTWARE
Can any of the company-specific risk be diversified away by investing in both CARDINAL HEALTH and OPERA SOFTWARE 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 OPERA SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARDINAL HEALTH and OPERA SOFTWARE, you can compare the effects of market volatilities on CARDINAL HEALTH and OPERA SOFTWARE 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 OPERA SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARDINAL HEALTH and OPERA SOFTWARE.
Diversification Opportunities for CARDINAL HEALTH and OPERA SOFTWARE
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between CARDINAL and OPERA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE 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 OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of CARDINAL HEALTH i.e., CARDINAL HEALTH and OPERA SOFTWARE go up and down completely randomly.
Pair Corralation between CARDINAL HEALTH and OPERA SOFTWARE
Assuming the 90 days trading horizon CARDINAL HEALTH is expected to generate 0.55 times more return on investment than OPERA SOFTWARE. However, CARDINAL HEALTH is 1.81 times less risky than OPERA SOFTWARE. It trades about 0.1 of its potential returns per unit of risk. OPERA SOFTWARE is currently generating about 0.0 per unit of risk. If you would invest 6,704 in CARDINAL HEALTH on October 11, 2024 and sell it today you would earn a total of 5,006 from holding CARDINAL HEALTH or generate 74.67% 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. OPERA SOFTWARE
Performance |
| Timeline |
| CARDINAL HEALTH |
| OPERA SOFTWARE |
CARDINAL HEALTH and OPERA SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARDINAL HEALTH and OPERA SOFTWARE
The main advantage of trading using opposite CARDINAL HEALTH and OPERA SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARDINAL HEALTH position performs unexpectedly, OPERA SOFTWARE 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 OPERA SOFTWARE will offset losses from the drop in OPERA SOFTWARE'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 |
| OPERA SOFTWARE vs. UNIQA INSURANCE GR | OPERA SOFTWARE vs. ZURICH INSURANCE GROUP | OPERA SOFTWARE vs. CARDINAL HEALTH | OPERA SOFTWARE vs. INSURANCE AUST GRP |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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