Correlation Between Cardinal Health, and Cemepe Investimentos

Can any of the company-specific risk be diversified away by investing in both Cardinal Health, and Cemepe Investimentos 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 Cardinal Health, and Cemepe Investimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardinal Health, and Cemepe Investimentos SA, you can compare the effects of market volatilities on Cardinal Health, and Cemepe Investimentos 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 Cardinal Health, with a short position of Cemepe Investimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health, and Cemepe Investimentos.

Diversification Opportunities for Cardinal Health, and Cemepe Investimentos

0.0

Correlation Coefficient

Cardinal Health,  Cemepe Investimentos

Pay attention - limited upside

The 3 months correlation between Cardinal and Cemepe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health, and Cemepe Investimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemepe Investimentos and Cardinal Health, 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 Cardinal Health, are associated (or correlated) with Cemepe Investimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemepe Investimentos has no effect on the direction of Cardinal Health, i.e., Cardinal Health, and Cemepe Investimentos go up and down completely randomly.

Pair Corralation between Cardinal Health, and Cemepe Investimentos

If you would invest  63,682  in Cardinal Health, on October 9, 2024 and sell it today you would earn a total of  9,180  from holding Cardinal Health, or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cardinal Health,  vs.  Cemepe Investimentos SA

Cardinal Health,

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cardinal Health, sustained solid returns over the last few months and may actually be approaching a breakup point.

Cemepe Investimentos

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Cemepe Investimentos SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cemepe Investimentos is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cardinal Health, and Cemepe Investimentos

The main advantage of trading using opposite Cardinal Health, and Cemepe Investimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health, position performs unexpectedly, Cemepe Investimentos 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 Cemepe Investimentos will offset losses from the drop in Cemepe Investimentos' long position.

The idea behind Cardinal Health, and Cemepe Investimentos SA 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.