Correlation Between CARDINAL HEALTH and 11880 Solutions

Can any of the company-specific risk be diversified away by investing in both CARDINAL HEALTH and 11880 Solutions 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 11880 Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CARDINAL HEALTH and 11880 Solutions AG, you can compare the effects of market volatilities on CARDINAL HEALTH and 11880 Solutions 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 11880 Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARDINAL HEALTH and 11880 Solutions.

Diversification Opportunities for CARDINAL HEALTH and 11880 Solutions

-0.1

Correlation Coefficient

CARDINAL HEALTH  11880 Solutions

Good diversification

The 3 months correlation between CARDINAL and 11880 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH and 11880 Solutions AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 11880 Solutions AG 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 11880 Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 11880 Solutions AG has no effect on the direction of CARDINAL HEALTH i.e., CARDINAL HEALTH and 11880 Solutions go up and down completely randomly.

Pair Corralation between CARDINAL HEALTH and 11880 Solutions

Assuming the 90 days trading horizon CARDINAL HEALTH is expected to generate 0.38 times more return on investment than 11880 Solutions. However, CARDINAL HEALTH is 2.66 times less risky than 11880 Solutions. It trades about 0.14 of its potential returns per unit of risk. 11880 Solutions AG is currently generating about 0.05 per unit of risk. If you would invest  10,180  in CARDINAL HEALTH on October 9, 2024 and sell it today you would earn a total of  1,355  from holding CARDINAL HEALTH or generate 13.31% return on investment over 90 days.

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

CARDINAL HEALTH  vs.  11880 Solutions AG

CARDINAL HEALTH

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CARDINAL HEALTH are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, CARDINAL HEALTH unveiled solid returns over the last few months and may actually be approaching a breakup point.

11880 Solutions AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 11880 Solutions AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, 11880 Solutions reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CARDINAL HEALTH and 11880 Solutions

The main advantage of trading using opposite CARDINAL HEALTH and 11880 Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARDINAL HEALTH position performs unexpectedly, 11880 Solutions 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 11880 Solutions will offset losses from the drop in 11880 Solutions' long position.

The idea behind CARDINAL HEALTH and 11880 Solutions AG 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..