Correlation Between Cardinal Health and Futura Medical
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Futura Medical 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 Futura Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Futura Medical, you can compare the effects of market volatilities on Cardinal Health and Futura Medical 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 Futura Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Futura Medical.
Diversification Opportunities for Cardinal Health and Futura Medical
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and Futura is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Futura Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futura Medical 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 Futura Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futura Medical has no effect on the direction of Cardinal Health i.e., Cardinal Health and Futura Medical go up and down completely randomly.
Pair Corralation between Cardinal Health and Futura Medical
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.54 times more return on investment than Futura Medical. However, Cardinal Health is 1.84 times less risky than Futura Medical. It trades about 0.48 of its potential returns per unit of risk. Futura Medical is currently generating about -0.09 per unit of risk. If you would invest 11,832 in Cardinal Health on October 28, 2024 and sell it today you would earn a total of 1,057 from holding Cardinal Health or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Futura Medical
Performance |
| Timeline |
| Cardinal Health |
| Futura Medical |
Cardinal Health and Futura Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Futura Medical
The main advantage of trading using opposite Cardinal Health and Futura Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Futura Medical 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 Futura Medical will offset losses from the drop in Futura Medical's long position.| Cardinal Health vs. FC Investment Trust | Cardinal Health vs. New Residential Investment | Cardinal Health vs. HCA Healthcare | Cardinal Health vs. Omega Healthcare Investors |
| Futura Medical vs. PureTech Health plc | Futura Medical vs. Bellevue Healthcare Trust | Futura Medical vs. Abingdon Health Plc | Futura Medical vs. Omega Healthcare Investors |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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