Correlation Between Cardinal Health and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on Cardinal Health and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and SOFI TECHNOLOGIES.
Diversification Opportunities for Cardinal Health and SOFI TECHNOLOGIES
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cardinal and SOFI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFI TECHNOLOGIES has no effect on the direction of Cardinal Health i.e., Cardinal Health and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Cardinal Health and SOFI TECHNOLOGIES
Assuming the 90 days horizon Cardinal Health is expected to generate 0.25 times more return on investment than SOFI TECHNOLOGIES. However, Cardinal Health is 3.96 times less risky than SOFI TECHNOLOGIES. It trades about -0.03 of its potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about -0.1 per unit of risk. If you would invest 12,315 in Cardinal Health on December 2, 2024 and sell it today you would lose (85.00) from holding Cardinal Health or give up 0.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cardinal Health vs. SOFI TECHNOLOGIES
Performance |
Timeline |
Cardinal Health |
SOFI TECHNOLOGIES |
Cardinal Health and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cardinal Health and SOFI TECHNOLOGIES
The main advantage of trading using opposite Cardinal Health and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES will offset losses from the drop in SOFI TECHNOLOGIES's long position.Cardinal Health vs. BANKINTER ADR 2007 | Cardinal Health vs. REVO INSURANCE SPA | Cardinal Health vs. Takark Jelzlogbank Nyrt | Cardinal Health vs. SHELF DRILLING LTD |
SOFI TECHNOLOGIES vs. Sinopec Shanghai Petrochemical | SOFI TECHNOLOGIES vs. EITZEN CHEMICALS | SOFI TECHNOLOGIES vs. SILICON LABORATOR | SOFI TECHNOLOGIES vs. Sekisui Chemical Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
CEOs Directory Screen CEOs from public companies around the world | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |