Correlation Between Cardinal Health and FC Investment
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and FC Investment 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 FC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and FC Investment Trust, you can compare the effects of market volatilities on Cardinal Health and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and FC Investment.
Diversification Opportunities for Cardinal Health and FC Investment
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cardinal and FCIT is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Cardinal Health i.e., Cardinal Health and FC Investment go up and down completely randomly.
Pair Corralation between Cardinal Health and FC Investment
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.98 times more return on investment than FC Investment. However, Cardinal Health is 1.02 times less risky than FC Investment. It trades about 0.22 of its potential returns per unit of risk. FC Investment Trust is currently generating about -0.08 per unit of risk. If you would invest 11,742 in Cardinal Health on October 14, 2024 and sell it today you would earn a total of 402.00 from holding Cardinal Health or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cardinal Health vs. FC Investment Trust
Performance |
| Timeline |
| Cardinal Health |
| FC Investment Trust |
Cardinal Health and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and FC Investment
The main advantage of trading using opposite Cardinal Health and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| Cardinal Health vs. Walmart | Cardinal Health vs. BYD Co | Cardinal Health vs. Volkswagen AG | Cardinal Health vs. Volkswagen AG Non Vtg |
| FC Investment vs. Naturhouse Health SA | FC Investment vs. Trellus Health plc | FC Investment vs. Bellevue Healthcare Trust | FC Investment vs. Cardinal Health |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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