Correlation Between Cardinal Health and Addvantage Techs

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Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Addvantage Techs 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 Addvantage Techs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Addvantage Techs Group, you can compare the effects of market volatilities on Cardinal Health and Addvantage Techs 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 Addvantage Techs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Addvantage Techs.

Diversification Opportunities for Cardinal Health and Addvantage Techs

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Cardinal and Addvantage is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Addvantage Techs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addvantage Techs 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 Addvantage Techs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addvantage Techs has no effect on the direction of Cardinal Health i.e., Cardinal Health and Addvantage Techs go up and down completely randomly.

Pair Corralation between Cardinal Health and Addvantage Techs

Considering the 90-day investment horizon Cardinal Health is expected to generate 0.42 times more return on investment than Addvantage Techs. However, Cardinal Health is 2.37 times less risky than Addvantage Techs. It trades about -0.2 of its potential returns per unit of risk. Addvantage Techs Group is currently generating about -0.31 per unit of risk. If you would invest  6,969  in Cardinal Health on June 28, 2022 and sell it today you would lose (364.00)  from holding Cardinal Health or give up 5.22% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Cardinal Health  vs.  Addvantage Techs Group

 Performance (%) 
       Timeline  
Cardinal Health 
Cardinal Performance
16 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cardinal Health reported solid returns over the last few months and may actually be approaching a breakup point.

Cardinal Price Channel

Addvantage Techs 
Addvantage Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Addvantage Techs Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Addvantage Techs showed solid returns over the last few months and may actually be approaching a breakup point.

Addvantage Price Channel

Cardinal Health and Addvantage Techs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cardinal Health and Addvantage Techs

The main advantage of trading using opposite Cardinal Health and Addvantage Techs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Addvantage Techs 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 Addvantage Techs will offset losses from the drop in Addvantage Techs' long position.
Cardinal Health vs. BUSHVELD MINERALS LTD
The idea behind Cardinal Health and Addvantage Techs Group 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.
Addvantage Techs vs. BUSHVELD MINERALS LTD
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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