Correlation Between Cardinal Health and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Catalyst Media 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 Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Catalyst Media Group, you can compare the effects of market volatilities on Cardinal Health and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Catalyst Media.
Diversification Opportunities for Cardinal Health and Catalyst Media
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and Catalyst is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Cardinal Health i.e., Cardinal Health and Catalyst Media go up and down completely randomly.
Pair Corralation between Cardinal Health and Catalyst Media
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.64 times more return on investment than Catalyst Media. However, Cardinal Health is 1.57 times less risky than Catalyst Media. It trades about 0.3 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.41 per unit of risk. If you would invest 11,325 in Cardinal Health on September 4, 2024 and sell it today you would earn a total of 979.00 from holding Cardinal Health or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cardinal Health vs. Catalyst Media Group
Performance |
| Timeline |
| Cardinal Health |
| Catalyst Media Group |
Cardinal Health and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Catalyst Media
The main advantage of trading using opposite Cardinal Health and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Cardinal Health vs. Samsung Electronics Co | Cardinal Health vs. Samsung Electronics Co | Cardinal Health vs. Hyundai Motor | Cardinal Health vs. Toyota Motor Corp |
| Catalyst Media vs. STMicroelectronics NV | Catalyst Media vs. TR Property Investment | Catalyst Media vs. Monks Investment Trust | Catalyst Media vs. Smithson Investment Trust |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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