Correlation Between Cardinal Health and ANZNZ

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

By analyzing existing cross correlation between Cardinal Health and ANZNZ 2166 18 FEB 25, you can compare the effects of market volatilities on Cardinal Health and ANZNZ 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 ANZNZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and ANZNZ.

Diversification Opportunities for Cardinal Health and ANZNZ

0.59

Correlation Coefficient

Cardinal Health  ANZNZ

Very weak diversification

The 3 months correlation between Cardinal and ANZNZ is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and ANZNZ 2166 18 FEB 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZNZ 2166 18 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 ANZNZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZNZ 2166 18 has no effect on the direction of Cardinal Health i.e., Cardinal Health and ANZNZ go up and down completely randomly.

Pair Corralation between Cardinal Health and ANZNZ

Considering the 90-day investment horizon Cardinal Health is expected to generate 1.59 times more return on investment than ANZNZ. However, Cardinal Health is 1.59 times more volatile than ANZNZ 2166 18 FEB 25. It trades about 0.13 of its potential returns per unit of risk. ANZNZ 2166 18 FEB 25 is currently generating about -0.12 per unit of risk. If you would invest  9,610  in Cardinal Health on September 30, 2024 and sell it today you would earn a total of  2,304  from holding Cardinal Health or generate 23.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	31.75%
Values	Daily Returns

Cardinal Health  vs.  ANZNZ 2166 18 FEB 25

Cardinal Health

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 7 (%) 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 January 2025.

ANZNZ 2166 18

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZNZ 2166 18 FEB 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ANZNZ 2166 18 FEB 25 investors.

Pair Trading with Cardinal Health and ANZNZ

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

The idea behind Cardinal Health and ANZNZ 2166 18 FEB 25 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.