Correlation Between Visteon Corp and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Visteon Corp 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 Visteon Corp and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visteon Corp and Cardinal Health, you can compare the effects of market volatilities on Visteon Corp 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 Visteon Corp with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visteon Corp and Cardinal Health.
Diversification Opportunities for Visteon Corp and Cardinal Health
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visteon and Cardinal is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Visteon Corp 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 Visteon Corp 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 Visteon Corp i.e., Visteon Corp and Cardinal Health go up and down completely randomly.
Pair Corralation between Visteon Corp and Cardinal Health
Allowing for the 90-day total investment horizon Visteon Corp is expected to generate 1.97 times less return on investment than Cardinal Health. In addition to that, Visteon Corp is 1.14 times more volatile than Cardinal Health. It trades about 0.07 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.15 per unit of volatility. If you would invest 11,613 in Cardinal Health on September 2, 2024 and sell it today you would earn a total of 611.00 from holding Cardinal Health or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visteon Corp vs. Cardinal Health
Performance |
| Timeline |
| Visteon Corp |
| Cardinal Health |
Visteon Corp and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visteon Corp and Cardinal Health
The main advantage of trading using opposite Visteon Corp and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visteon Corp 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.| Visteon Corp vs. Gentex | Visteon Corp vs. Adient PLC | Visteon Corp vs. Autoliv | Visteon Corp vs. Fox Factory Holding |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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