Correlation Between NORDHEALTH and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both NORDHEALTH and Cardinal Health 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 NORDHEALTH and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORDHEALTH AS NK and Cardinal Health, you can compare the effects of market volatilities on NORDHEALTH and Cardinal Health 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 NORDHEALTH with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORDHEALTH and Cardinal Health.
Diversification Opportunities for NORDHEALTH and Cardinal Health
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NORDHEALTH and Cardinal is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding NORDHEALTH AS NK and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and NORDHEALTH 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 NORDHEALTH AS NK are associated (or correlated) with Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of NORDHEALTH i.e., NORDHEALTH and Cardinal Health go up and down completely randomly.
Pair Corralation between NORDHEALTH and Cardinal Health
Assuming the 90 days horizon NORDHEALTH AS NK is expected to generate 1.95 times more return on investment than Cardinal Health. However, NORDHEALTH is 1.95 times more volatile than Cardinal Health. It trades about 0.14 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.14 per unit of risk. If you would invest 268.00 in NORDHEALTH AS NK on August 24, 2024 and sell it today you would earn a total of 39.00 from holding NORDHEALTH AS NK or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORDHEALTH AS NK vs. Cardinal Health
Performance |
| Timeline |
| NORDHEALTH AS NK |
| Cardinal Health |
NORDHEALTH and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORDHEALTH and Cardinal Health
The main advantage of trading using opposite NORDHEALTH and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORDHEALTH position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.The idea behind NORDHEALTH AS NK and Cardinal Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cardinal Health vs. Shanghai Pharmaceuticals Holding | Cardinal Health vs. Sinopharm Group Co | Cardinal Health vs. Superior Plus Corp | Cardinal Health vs. NMI Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |