Correlation Between CARDINAL HEALTH and Qingling Motors
Can any of the company-specific risk be diversified away by investing in both CARDINAL HEALTH and Qingling Motors 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 Qingling Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARDINAL HEALTH and Qingling Motors Co, you can compare the effects of market volatilities on CARDINAL HEALTH and Qingling Motors 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 Qingling Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARDINAL HEALTH and Qingling Motors.
Diversification Opportunities for CARDINAL HEALTH and Qingling Motors
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CARDINAL and Qingling is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH and Qingling Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingling Motors 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 Qingling Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingling Motors has no effect on the direction of CARDINAL HEALTH i.e., CARDINAL HEALTH and Qingling Motors go up and down completely randomly.
Pair Corralation between CARDINAL HEALTH and Qingling Motors
Assuming the 90 days trading horizon CARDINAL HEALTH is expected to generate 0.29 times more return on investment than Qingling Motors. However, CARDINAL HEALTH is 3.47 times less risky than Qingling Motors. It trades about 0.09 of its potential returns per unit of risk. Qingling Motors Co is currently generating about -0.01 per unit of risk. If you would invest 6,772 in CARDINAL HEALTH on October 10, 2024 and sell it today you would earn a total of 4,763 from holding CARDINAL HEALTH or generate 70.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARDINAL HEALTH vs. Qingling Motors Co
Performance |
| Timeline |
| CARDINAL HEALTH |
| Qingling Motors |
CARDINAL HEALTH and Qingling Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARDINAL HEALTH and Qingling Motors
The main advantage of trading using opposite CARDINAL HEALTH and Qingling Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARDINAL HEALTH position performs unexpectedly, Qingling Motors 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 Qingling Motors will offset losses from the drop in Qingling Motors' long position.| CARDINAL HEALTH vs. PENN NATL GAMING | CARDINAL HEALTH vs. Linedata Services SA | CARDINAL HEALTH vs. OURGAME INTHOLDL 00005 | CARDINAL HEALTH vs. NTT DATA |
| Qingling Motors vs. OPKO HEALTH | Qingling Motors vs. Phibro Animal Health | Qingling Motors vs. RCI Hospitality Holdings | Qingling Motors 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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