Correlation Between Japan Asia and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and Cardinal Health, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Cardinal Health.
Diversification Opportunities for Japan Asia and Cardinal Health
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Japan and Cardinal is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and Cardinal Health go up and down completely randomly.
Pair Corralation between Japan Asia and Cardinal Health
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the Cardinal Health. But the stock apears to be less risky and, when comparing its historical volatility, Japan Asia Investment is 1.14 times less risky than Cardinal Health. The stock trades about -0.04 of its potential returns per unit of risk. The Cardinal Health is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 10,212 in Cardinal Health on September 12, 2024 and sell it today you would earn a total of 1,383 from holding Cardinal Health or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. Cardinal Health
Performance |
| Timeline |
| Japan Asia Investment |
| Cardinal Health |
Japan Asia and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Cardinal Health
The main advantage of trading using opposite Japan Asia and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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