Correlation Between Cardinal Health and Synthomer Plc
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Synthomer Plc 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 Synthomer Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Synthomer plc, you can compare the effects of market volatilities on Cardinal Health and Synthomer Plc 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 Synthomer Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Synthomer Plc.
Diversification Opportunities for Cardinal Health and Synthomer Plc
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Synthomer is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Synthomer plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synthomer plc 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 Synthomer Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synthomer plc has no effect on the direction of Cardinal Health i.e., Cardinal Health and Synthomer Plc go up and down completely randomly.
Pair Corralation between Cardinal Health and Synthomer Plc
Assuming the 90 days trading horizon Cardinal Health is expected to generate 0.45 times more return on investment than Synthomer Plc. However, Cardinal Health is 2.22 times less risky than Synthomer Plc. It trades about 0.12 of its potential returns per unit of risk. Synthomer plc is currently generating about -0.13 per unit of risk. If you would invest 9,748 in Cardinal Health on November 28, 2024 and sell it today you would earn a total of 3,046 from holding Cardinal Health or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.87% |
| Values | Daily Returns |
Cardinal Health vs. Synthomer plc
Performance |
| Timeline |
| Cardinal Health |
| Synthomer plc |
Cardinal Health and Synthomer Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Synthomer Plc
The main advantage of trading using opposite Cardinal Health and Synthomer Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Synthomer Plc 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 Synthomer Plc will offset losses from the drop in Synthomer Plc's long position.| Cardinal Health vs. UNIQA Insurance Group | Cardinal Health vs. Tetragon Financial Group | Cardinal Health vs. Playtech Plc | Cardinal Health vs. Indutrade AB |
| Synthomer Plc vs. National Beverage Corp | Synthomer Plc vs. Dolly Varden Silver | Synthomer Plc vs. First Majestic Silver | Synthomer Plc vs. Foresight Environmental Infrastructure |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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