Correlation Between Electrovaya Common and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and Cardinal Health 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 Electrovaya Common and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and Cardinal Health, you can compare the effects of market volatilities on Electrovaya Common and Cardinal Health 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 Electrovaya Common with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Cardinal Health.
Diversification Opportunities for Electrovaya Common and Cardinal Health
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electrovaya and Cardinal is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and Cardinal Health go up and down completely randomly.
Pair Corralation between Electrovaya Common and Cardinal Health
Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 2.1 times more return on investment than Cardinal Health. However, Electrovaya Common is 2.1 times more volatile than Cardinal Health. It trades about 0.27 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.26 per unit of risk. If you would invest 206.00 in Electrovaya Common Shares on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Electrovaya Common Shares or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrovaya Common Shares vs. Cardinal Health
Performance |
| Timeline |
| Electrovaya Common Shares |
| Cardinal Health |
Electrovaya Common and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrovaya Common and Cardinal Health
The main advantage of trading using opposite Electrovaya Common and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| Electrovaya Common vs. Bloom Energy Corp | Electrovaya Common vs. Microvast Holdings | Electrovaya Common vs. Solid Power | Electrovaya Common vs. FREYR Battery SA |
| Cardinal Health vs. Humana Inc | Cardinal Health vs. Cigna Corp | Cardinal Health vs. Elevance Health | Cardinal Health vs. Centene Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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