Correlation Between Cardinal Health and Miniso Group

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

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

Diversification Opportunities for Cardinal Health and Miniso Group

0.33

Correlation Coefficient

Cardinal Health  Miniso Group

Weak diversification

The 3 months correlation between Cardinal and Miniso is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding 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 Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of Cardinal Health i.e., Cardinal Health and Miniso Group go up and down completely randomly.

Pair Corralation between Cardinal Health and Miniso Group

Considering the 90-day investment horizon Cardinal Health is expected to generate 3.89 times less return on investment than Miniso Group. But when comparing it to its historical volatility, Cardinal Health is 3.04 times less risky than Miniso Group. It trades about 0.08 of its potential returns per unit of risk. Miniso Group Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,896  in Miniso Group Holding on October 3, 2024 and sell it today you would earn a total of  492.00  from holding Miniso Group Holding or generate 25.95% return on investment over 90 days.

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

Cardinal Health  vs.  Miniso Group Holding

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 inconsistent basic indicators, Cardinal Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Miniso Group Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardinal Health and Miniso Group

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

The idea behind Cardinal Health and Miniso Group Holding 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.