Correlation Between Assurant and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Assurant 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 Assurant and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and Cardinal Health, you can compare the effects of market volatilities on Assurant 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 Assurant with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Cardinal Health.
Diversification Opportunities for Assurant and Cardinal Health
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Assurant and Cardinal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Assurant 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 Assurant 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 Assurant i.e., Assurant and Cardinal Health go up and down completely randomly.
Pair Corralation between Assurant and Cardinal Health
Considering the 90-day investment horizon Assurant is expected to generate 0.69 times more return on investment than Cardinal Health. However, Assurant is 1.44 times less risky than Cardinal Health. It trades about 0.52 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.26 per unit of risk. If you would invest 19,170 in Assurant on September 1, 2024 and sell it today you would earn a total of 3,540 from holding Assurant or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assurant vs. Cardinal Health
Performance |
| Timeline |
| Assurant |
| Cardinal Health |
Assurant and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and Cardinal Health
The main advantage of trading using opposite Assurant and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant 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.| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
| Cardinal Health vs. Humana Inc | Cardinal Health vs. Cigna Corp | Cardinal Health vs. Elevance Health | Cardinal Health vs. Centene Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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