Correlation Between Cornish Metals and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Cardinal Health, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Cardinal Health.
Diversification Opportunities for Cornish Metals and Cardinal Health
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cornish and Cardinal is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Cornish Metals 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 Cornish Metals 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 Cornish Metals i.e., Cornish Metals and Cardinal Health go up and down completely randomly.
Pair Corralation between Cornish Metals and Cardinal Health
Assuming the 90 days trading horizon Cornish Metals is expected to generate 2.34 times more return on investment than Cardinal Health. However, Cornish Metals is 2.34 times more volatile than Cardinal Health. It trades about 0.15 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.08 per unit of risk. If you would invest 635.00 in Cornish Metals on September 24, 2024 and sell it today you would earn a total of 230.00 from holding Cornish Metals or generate 36.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cornish Metals vs. Cardinal Health
Performance |
Timeline |
Cornish Metals |
Cardinal Health |
Cornish Metals and Cardinal Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cornish Metals and Cardinal Health
The main advantage of trading using opposite Cornish Metals and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Ferrexpo PLC | Cornish Metals vs. Atalaya Mining |
Cardinal Health vs. GoldMining | Cardinal Health vs. Metals Exploration Plc | Cardinal Health vs. DFS Furniture PLC | Cardinal Health vs. Cornish Metals |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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