Correlation Between Core One and Cardio Diagnostics

Can any of the company-specific risk be diversified away by investing in both Core One and Cardio Diagnostics 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 Core One and Cardio Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Core One Labs and Cardio Diagnostics Holdings, you can compare the effects of market volatilities on Core One and Cardio Diagnostics 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 Core One with a short position of Cardio Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core One and Cardio Diagnostics.

Diversification Opportunities for Core One and Cardio Diagnostics

-0.18

Correlation Coefficient

Core One  Cardio Diagnostics

Good diversification

The 3 months correlation between Core and Cardio is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Core One Labs and Cardio Diagnostics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardio Diagnostics and Core One 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 Core One Labs are associated (or correlated) with Cardio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardio Diagnostics has no effect on the direction of Core One i.e., Core One and Cardio Diagnostics go up and down completely randomly.

Pair Corralation between Core One and Cardio Diagnostics

Assuming the 90 days horizon Core One Labs is expected to generate 28.65 times more return on investment than Cardio Diagnostics. However, Core One is 28.65 times more volatile than Cardio Diagnostics Holdings. It trades about 0.21 of its potential returns per unit of risk. Cardio Diagnostics Holdings is currently generating about -0.02 per unit of risk. If you would invest  9.00  in Core One Labs on May 24, 2025 and sell it today you would lose (6.78) from holding Core One Labs or give up 75.33% of portfolio value over 90 days.

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

Core One Labs  vs.  Cardio Diagnostics Holdings

Core One Labs

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Core One Labs are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, Core One reported solid returns over the last few months and may actually be approaching a breakup point.

Cardio Diagnostics

Risk-Adjusted Performance

Weakest

Over the last 90 days Cardio Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Cardio Diagnostics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Core One and Cardio Diagnostics

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

The idea behind Core One Labs and Cardio Diagnostics Holdings 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.