Correlation Between Cardinal Health and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Naturhouse Health 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 Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Naturhouse Health SA, you can compare the effects of market volatilities on Cardinal Health and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Naturhouse Health.
Diversification Opportunities for Cardinal Health and Naturhouse Health
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cardinal and Naturhouse is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Cardinal Health i.e., Cardinal Health and Naturhouse Health go up and down completely randomly.
Pair Corralation between Cardinal Health and Naturhouse Health
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.53 times more return on investment than Naturhouse Health. However, Cardinal Health is 1.87 times less risky than Naturhouse Health. It trades about 0.06 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.03 per unit of risk. If you would invest 9,215 in Cardinal Health on August 28, 2024 and sell it today you would earn a total of 2,933 from holding Cardinal Health or generate 31.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.31% |
| Values | Daily Returns |
Cardinal Health vs. Naturhouse Health SA
Performance |
| Timeline |
| Cardinal Health |
| Naturhouse Health |
Cardinal Health and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Naturhouse Health
The main advantage of trading using opposite Cardinal Health and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Cardinal Health vs. Sabre Insurance Group | Cardinal Health vs. Cairo Communication SpA | Cardinal Health vs. Deltex Medical Group | Cardinal Health vs. UNIQA Insurance Group |
| Naturhouse Health vs. Aberdeen Diversified Income | Naturhouse Health vs. Oakley Capital Investments | Naturhouse Health vs. Monks Investment Trust | Naturhouse Health vs. Livermore Investments Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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