Correlation Between BW OFFSHORE and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE 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 BW OFFSHORE and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW OFFSHORE LTD and Cardinal Health, you can compare the effects of market volatilities on BW OFFSHORE 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 BW OFFSHORE with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Cardinal Health.
Diversification Opportunities for BW OFFSHORE and Cardinal Health
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XY81 and Cardinal is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and BW OFFSHORE 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 BW OFFSHORE LTD 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 BW OFFSHORE i.e., BW OFFSHORE and Cardinal Health go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Cardinal Health
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 1.48 times less return on investment than Cardinal Health. In addition to that, BW OFFSHORE is 1.52 times more volatile than Cardinal Health. It trades about 0.04 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 7,479 in Cardinal Health on August 31, 2024 and sell it today you would earn a total of 4,116 from holding Cardinal Health or generate 55.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. Cardinal Health
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Cardinal Health |
BW OFFSHORE and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Cardinal Health
The main advantage of trading using opposite BW OFFSHORE and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE 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.| BW OFFSHORE vs. Schlumberger Limited | BW OFFSHORE vs. Halliburton | BW OFFSHORE vs. Tenaris SA | BW OFFSHORE vs. Superior Plus Corp |
| Cardinal Health vs. China Resources Beer | Cardinal Health vs. AIR PRODCHEMICALS | Cardinal Health vs. GOODYEAR T RUBBER | Cardinal Health vs. APPLIED MATERIALS |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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