Correlation Between CARDINAL and Old Dominion
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By analyzing existing cross correlation between CARDINAL HEALTH INC and Old Dominion Freight, you can compare the effects of market volatilities on CARDINAL and Old Dominion 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 with a short position of Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARDINAL and Old Dominion.
Diversification Opportunities for CARDINAL and Old Dominion
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CARDINAL and Old is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH INC and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight and CARDINAL 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 INC are associated (or correlated) with Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of CARDINAL i.e., CARDINAL and Old Dominion go up and down completely randomly.
Pair Corralation between CARDINAL and Old Dominion
Assuming the 90 days trading horizon CARDINAL HEALTH INC is expected to generate 0.4 times more return on investment than Old Dominion. However, CARDINAL HEALTH INC is 2.53 times less risky than Old Dominion. It trades about 0.12 of its potential returns per unit of risk. Old Dominion Freight is currently generating about -0.04 per unit of risk. If you would invest 8,449 in CARDINAL HEALTH INC on December 28, 2024 and sell it today you would earn a total of 348.00 from holding CARDINAL HEALTH INC or generate 4.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 63.93% |
Values | Daily Returns |
CARDINAL HEALTH INC vs. Old Dominion Freight
Performance |
Timeline |
CARDINAL HEALTH INC |
Old Dominion Freight |
CARDINAL and Old Dominion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CARDINAL and Old Dominion
The main advantage of trading using opposite CARDINAL and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARDINAL position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.CARDINAL vs. Evertz Technologies Limited | CARDINAL vs. Lipocine | CARDINAL vs. Schweiter Technologies AG | CARDINAL vs. Webus International Limited |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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