Correlation Between Cardinal Health and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Spire Healthcare 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 Spire Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Spire Healthcare Group, you can compare the effects of market volatilities on Cardinal Health and Spire Healthcare 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 Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Spire Healthcare.
Diversification Opportunities for Cardinal Health and Spire Healthcare
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and Spire is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Cardinal Health i.e., Cardinal Health and Spire Healthcare go up and down completely randomly.
Pair Corralation between Cardinal Health and Spire Healthcare
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.77 times more return on investment than Spire Healthcare. However, Cardinal Health is 1.29 times less risky than Spire Healthcare. It trades about 0.28 of its potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.09 per unit of risk. If you would invest 11,800 in Cardinal Health on November 3, 2024 and sell it today you would earn a total of 771.00 from holding Cardinal Health or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Spire Healthcare Group
Performance |
| Timeline |
| Cardinal Health |
| Spire Healthcare |
Cardinal Health and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Spire Healthcare
The main advantage of trading using opposite Cardinal Health and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Spire Healthcare 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| Cardinal Health vs. Ion Beam Applications | Cardinal Health vs. Datalogic | Cardinal Health vs. Teradata Corp | Cardinal Health vs. Public Storage |
| Spire Healthcare vs. National Beverage Corp | Spire Healthcare vs. Advanced Medical Solutions | Spire Healthcare vs. Aeorema Communications Plc | Spire Healthcare vs. Creo Medical 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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