Correlation Between Cardinal Health and Agilent Technologies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Agilent 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 Agilent 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 Agilent Technologies, you can compare the effects of market volatilities on Cardinal Health and Agilent 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 Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Agilent Technologies.

Diversification Opportunities for Cardinal Health and Agilent Technologies

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cardinal and Agilent is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent 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 Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Cardinal Health i.e., Cardinal Health and Agilent Technologies go up and down completely randomly.

Pair Corralation between Cardinal Health and Agilent Technologies

Considering the 90-day investment horizon Cardinal Health is expected to generate 0.69 times more return on investment than Agilent Technologies. However, Cardinal Health is 1.45 times less risky than Agilent Technologies. It trades about -0.13 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.17 per unit of risk. If you would invest  5,632  in Cardinal Health on March 31, 2022 and sell it today you would lose (250.00)  from holding Cardinal Health or give up 4.44% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Cardinal Health  vs.  Agilent Technologies

 Performance (%) 
      Timeline 
Cardinal Health 
Cardinal Performance
0 of 100
Over the last 90 days Cardinal Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cardinal Health is not utilizing all of its potentials. The new stock price disturbance, may contribute to mid-run losses for the stockholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0385
Payout Ratio
0.41
Last Split Factor
3:2
Forward Annual Dividend Rate
1.98
Dividend Date
2022-07-15
Ex Dividend Date
2022-06-30
Last Split Date
2001-04-23

Cardinal Price Channel

Agilent Technologies 
Agilent Performance
0 of 100
Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Agilent Price Channel

Cardinal Health and Agilent Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Cardinal Health and Agilent Technologies

The main advantage of trading using opposite Cardinal Health and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Agilent 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.
The idea behind Cardinal Health and Agilent Technologies 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go