Correlation Between Transportadora and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Cardinal Health, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Cardinal Health.
Diversification Opportunities for Transportadora and Cardinal Health
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and Cardinal is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and Cardinal Health go up and down completely randomly.
Pair Corralation between Transportadora and Cardinal Health
Considering the 90-day investment horizon Transportadora de Gas is expected to generate 1.29 times more return on investment than Cardinal Health. However, Transportadora is 1.29 times more volatile than Cardinal Health. It trades about 0.55 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.2 per unit of risk. If you would invest 2,088 in Transportadora de Gas on August 24, 2024 and sell it today you would earn a total of 868.00 from holding Transportadora de Gas or generate 41.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Cardinal Health
Performance |
| Timeline |
| Transportadora de Gas |
| Cardinal Health |
Transportadora and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Cardinal Health
The main advantage of trading using opposite Transportadora and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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