Correlation Between Cardinal Health and TOREX SEMICONDUCTOR

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

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

Diversification Opportunities for Cardinal Health and TOREX SEMICONDUCTOR

-0.77

Correlation Coefficient

Cardinal Health  TOREX SEMICONDUCTOR

Pay attention - limited upside

The 3 months correlation between Cardinal and TOREX is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and TOREX SEMICONDUCTOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOREX SEMICONDUCTOR LTD 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 TOREX SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOREX SEMICONDUCTOR LTD has no effect on the direction of Cardinal Health i.e., Cardinal Health and TOREX SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between Cardinal Health and TOREX SEMICONDUCTOR

Assuming the 90 days horizon Cardinal Health is expected to generate 0.98 times more return on investment than TOREX SEMICONDUCTOR. However, Cardinal Health is 1.02 times less risky than TOREX SEMICONDUCTOR. It trades about 0.11 of its potential returns per unit of risk. TOREX SEMICONDUCTOR LTD is currently generating about -0.25 per unit of risk. If you would invest  10,130  in Cardinal Health on October 6, 2024 and sell it today you would earn a total of  1,270  from holding Cardinal Health or generate 12.54% return on investment over 90 days.

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

Cardinal Health  vs.  TOREX SEMICONDUCTOR LTD

Cardinal Health

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Cardinal Health reported solid returns over the last few months and may actually be approaching a breakup point.

TOREX SEMICONDUCTOR LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOREX SEMICONDUCTOR LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cardinal Health and TOREX SEMICONDUCTOR

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

The idea behind Cardinal Health and TOREX SEMICONDUCTOR LTD 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.