Correlation Between Atmos Energy and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Atmos Energy 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 Atmos Energy and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmos Energy and Cardinal Health, you can compare the effects of market volatilities on Atmos Energy 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 Atmos Energy with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmos Energy and Cardinal Health.
Diversification Opportunities for Atmos Energy and Cardinal Health
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atmos and Cardinal is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Atmos Energy and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Atmos Energy 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 Atmos Energy 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 Atmos Energy i.e., Atmos Energy and Cardinal Health go up and down completely randomly.
Pair Corralation between Atmos Energy and Cardinal Health
Considering the 90-day investment horizon Atmos Energy is expected to generate 2.08 times less return on investment than Cardinal Health. But when comparing it to its historical volatility, Atmos Energy is 2.29 times less risky than Cardinal Health. It trades about 0.23 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 11,192 in Cardinal Health on August 24, 2024 and sell it today you would earn a total of 1,150 from holding Cardinal Health or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmos Energy vs. Cardinal Health
Performance |
| Timeline |
| Atmos Energy |
| Cardinal Health |
Atmos Energy and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmos Energy and Cardinal Health
The main advantage of trading using opposite Atmos Energy and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmos Energy 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.| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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