Correlation Between Cardinal Health, and Check Point
Can any of the company-specific risk be diversified away by investing in both Cardinal Health, and Check Point 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 Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health, and Check Point Software, you can compare the effects of market volatilities on Cardinal Health, and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health, and Check Point.
Diversification Opportunities for Cardinal Health, and Check Point
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and Check is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health, and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Cardinal Health, i.e., Cardinal Health, and Check Point go up and down completely randomly.
Pair Corralation between Cardinal Health, and Check Point
Assuming the 90 days trading horizon Cardinal Health, is expected to generate 0.54 times more return on investment than Check Point. However, Cardinal Health, is 1.84 times less risky than Check Point. It trades about 0.22 of its potential returns per unit of risk. Check Point Software is currently generating about 0.1 per unit of risk. If you would invest 71,500 in Cardinal Health, on November 2, 2024 and sell it today you would earn a total of 1,362 from holding Cardinal Health, or generate 1.9% 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. Check Point Software
Performance |
| Timeline |
| Cardinal Health, |
| Check Point Software |
Cardinal Health, and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health, and Check Point
The main advantage of trading using opposite Cardinal Health, and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health, position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Cardinal Health, vs. Taiwan Semiconductor Manufacturing | Cardinal Health, vs. Apple Inc | Cardinal Health, vs. Alibaba Group Holding | Cardinal Health, vs. Microsoft |
| Check Point vs. Taiwan Semiconductor Manufacturing | Check Point vs. Apple Inc | Check Point vs. Alibaba Group Holding | Check Point vs. Microsoft |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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