Correlation Between Gossan Resources and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Gossan Resources 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 Gossan Resources and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gossan Resources and Cardinal Health, you can compare the effects of market volatilities on Gossan Resources 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 Gossan Resources with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gossan Resources and Cardinal Health.
Diversification Opportunities for Gossan Resources and Cardinal Health
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gossan and Cardinal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gossan Resources and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Gossan Resources 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 Gossan Resources 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 Gossan Resources i.e., Gossan Resources and Cardinal Health go up and down completely randomly.
Pair Corralation between Gossan Resources and Cardinal Health
Assuming the 90 days horizon Gossan Resources is expected to generate 0.88 times more return on investment than Cardinal Health. However, Gossan Resources is 1.14 times less risky than Cardinal Health. It trades about 0.31 of its potential returns per unit of risk. Cardinal Health is currently generating about -0.1 per unit of risk. If you would invest 1.00 in Gossan Resources on September 14, 2024 and sell it today you would earn a total of 0.10 from holding Gossan Resources or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gossan Resources vs. Cardinal Health
Performance |
| Timeline |
| Gossan Resources |
| Cardinal Health |
Gossan Resources and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gossan Resources and Cardinal Health
The main advantage of trading using opposite Gossan Resources and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gossan Resources 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.| Gossan Resources vs. Air Transport Services | Gossan Resources vs. NISSIN FOODS HLDGS | Gossan Resources vs. Columbia Sportswear | Gossan Resources vs. Tyson Foods |
| Cardinal Health vs. Henry Schein | Cardinal Health vs. Superior Plus Corp | Cardinal Health vs. NMI Holdings | Cardinal Health vs. SIVERS SEMICONDUCTORS AB |
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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