Correlation Between China BlueChemical and CARDINAL HEALTH
Can any of the company-specific risk be diversified away by investing in both China BlueChemical 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 China BlueChemical and CARDINAL HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and CARDINAL HEALTH, you can compare the effects of market volatilities on China BlueChemical 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 China BlueChemical with a short position of CARDINAL HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and CARDINAL HEALTH.
Diversification Opportunities for China BlueChemical and CARDINAL HEALTH
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and CARDINAL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and CARDINAL HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH and China BlueChemical 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 China BlueChemical 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 China BlueChemical i.e., China BlueChemical and CARDINAL HEALTH go up and down completely randomly.
Pair Corralation between China BlueChemical and CARDINAL HEALTH
Assuming the 90 days horizon China BlueChemical is expected to under-perform the CARDINAL HEALTH. In addition to that, China BlueChemical is 3.57 times more volatile than CARDINAL HEALTH. It trades about -0.16 of its total potential returns per unit of risk. CARDINAL HEALTH is currently generating about 0.39 per unit of volatility. If you would invest 11,535 in CARDINAL HEALTH on November 7, 2024 and sell it today you would earn a total of 785.00 from holding CARDINAL HEALTH or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. CARDINAL HEALTH
Performance |
| Timeline |
| China BlueChemical |
| CARDINAL HEALTH |
China BlueChemical and CARDINAL HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and CARDINAL HEALTH
The main advantage of trading using opposite China BlueChemical and CARDINAL HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical 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.| China BlueChemical vs. GBS Software AG | China BlueChemical vs. Hochschild Mining plc | China BlueChemical vs. Axway Software SA | China BlueChemical vs. PENN NATL GAMING |
| CARDINAL HEALTH vs. HF SINCLAIR P | CARDINAL HEALTH vs. Geely Automobile Holdings | CARDINAL HEALTH vs. Altair Engineering | CARDINAL HEALTH vs. Infrastrutture Wireless Italiane |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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