Correlation Between 842400HN6 and Cardinal Health

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Can any of the company-specific risk be diversified away by investing in both 842400HN6 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 842400HN6 and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EIX 345 01 FEB 52 and Cardinal Health, you can compare the effects of market volatilities on 842400HN6 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 842400HN6 with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of 842400HN6 and Cardinal Health.

Diversification Opportunities for 842400HN6 and Cardinal Health

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between 842400HN6 and Cardinal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EIX 345 01 FEB 52 and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and 842400HN6 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 EIX 345 01 FEB 52 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 842400HN6 i.e., 842400HN6 and Cardinal Health go up and down completely randomly.

Pair Corralation between 842400HN6 and Cardinal Health

If you would invest  11,784  in Cardinal Health on October 24, 2024 and sell it today you would earn a total of  999.00  from holding Cardinal Health or generate 8.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy5.56%
ValuesDaily Returns

EIX 345 01 FEB 52  vs.  Cardinal Health

 Performance 
       Timeline  
EIX 345 01 

Risk-Adjusted Performance

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Over the last 90 days EIX 345 01 FEB 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 842400HN6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Cardinal Health 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Cardinal Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

842400HN6 and Cardinal Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 842400HN6 and Cardinal Health

The main advantage of trading using opposite 842400HN6 and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 842400HN6 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.
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The idea behind EIX 345 01 FEB 52 and Cardinal Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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