Correlation Between Cardinal Health and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Sealed Air 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 Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Sealed Air Corp, you can compare the effects of market volatilities on Cardinal Health and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Sealed Air.
Diversification Opportunities for Cardinal Health and Sealed Air
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cardinal and Sealed is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of Cardinal Health i.e., Cardinal Health and Sealed Air go up and down completely randomly.
Pair Corralation between Cardinal Health and Sealed Air
Assuming the 90 days trading horizon Cardinal Health is expected to generate 1.92 times more return on investment than Sealed Air. However, Cardinal Health is 1.92 times more volatile than Sealed Air Corp. It trades about 0.23 of its potential returns per unit of risk. Sealed Air Corp is currently generating about 0.02 per unit of risk. If you would invest 11,062 in Cardinal Health on August 30, 2024 and sell it today you would earn a total of 1,210 from holding Cardinal Health or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Sealed Air Corp
Performance |
| Timeline |
| Cardinal Health |
| Sealed Air Corp |
Cardinal Health and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Sealed Air
The main advantage of trading using opposite Cardinal Health and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Cardinal Health vs. Bytes Technology | Cardinal Health vs. Pfeiffer Vacuum Technology | Cardinal Health vs. Zegona Communications Plc | Cardinal Health vs. Albion Technology General |
| Sealed Air vs. MTI Wireless Edge | Sealed Air vs. PPHE Hotel Group | Sealed Air vs. Vienna Insurance Group | Sealed Air vs. Wyndham Hotels Resorts |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |