Correlation Between Vishay Intertechnology and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology 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 Vishay Intertechnology and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Cardinal Health, you can compare the effects of market volatilities on Vishay Intertechnology 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 Vishay Intertechnology with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Cardinal Health.
Diversification Opportunities for Vishay Intertechnology and Cardinal Health
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vishay and Cardinal is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Vishay Intertechnology 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 Vishay Intertechnology 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 Vishay Intertechnology i.e., Vishay Intertechnology and Cardinal Health go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and Cardinal Health
Considering the 90-day investment horizon Vishay Intertechnology is expected to under-perform the Cardinal Health. In addition to that, Vishay Intertechnology is 1.48 times more volatile than Cardinal Health. It trades about -0.01 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.08 per unit of volatility. If you would invest 7,557 in Cardinal Health on November 5, 2024 and sell it today you would earn a total of 4,809 from holding Cardinal Health or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vishay Intertechnology vs. Cardinal Health
Performance |
| Timeline |
| Vishay Intertechnology |
| Cardinal Health |
Vishay Intertechnology and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and Cardinal Health
The main advantage of trading using opposite Vishay Intertechnology and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology 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.| Vishay Intertechnology vs. Silicon Laboratories | Vishay Intertechnology vs. Diodes Incorporated | Vishay Intertechnology vs. MACOM Technology Solutions | Vishay Intertechnology vs. FormFactor |
| Cardinal Health vs. Pennant Group | Cardinal Health vs. The Ensign Group | Cardinal Health vs. Encompass Health Corp | Cardinal Health vs. Healthcare Services Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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