Correlation Between Cardinal Health and Akso Health

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

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

Diversification Opportunities for Cardinal Health and Akso Health

-0.55

Correlation Coefficient

Cardinal Health  Akso Health

Excellent diversification

The 3 months correlation between Cardinal and Akso is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Akso Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akso Health Group 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 Akso Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akso Health Group has no effect on the direction of Cardinal Health i.e., Cardinal Health and Akso Health go up and down completely randomly.

Pair Corralation between Cardinal Health and Akso Health

Considering the 90-day investment horizon Cardinal Health is expected to generate 0.18 times more return on investment than Akso Health. However, Cardinal Health is 5.48 times less risky than Akso Health. It trades about 0.08 of its potential returns per unit of risk. Akso Health Group is currently generating about -0.01 per unit of risk. If you would invest  11,414  in Cardinal Health on September 3, 2024 and sell it today you would earn a total of  810.00  from holding Cardinal Health or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cardinal Health  vs.  Akso Health Group

Cardinal Health

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Cardinal Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Akso Health Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akso Health Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Cardinal Health and Akso Health

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

The idea behind Cardinal Health and Akso Health Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.