Correlation Between Cardinal Health, and HCA Healthcare,
Can any of the company-specific risk be diversified away by investing in both Cardinal Health, and HCA Healthcare, 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 HCA Healthcare, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health, and HCA Healthcare,, you can compare the effects of market volatilities on Cardinal Health, and HCA Healthcare, 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 HCA Healthcare,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health, and HCA Healthcare,.
Diversification Opportunities for Cardinal Health, and HCA Healthcare,
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and HCA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health, and HCA Healthcare, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare, 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 HCA Healthcare,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare, has no effect on the direction of Cardinal Health, i.e., Cardinal Health, and HCA Healthcare, go up and down completely randomly.
Pair Corralation between Cardinal Health, and HCA Healthcare,
Assuming the 90 days trading horizon Cardinal Health, is expected to generate 1.88 times more return on investment than HCA Healthcare,. However, Cardinal Health, is 1.88 times more volatile than HCA Healthcare,. It trades about 0.28 of its potential returns per unit of risk. HCA Healthcare, is currently generating about 0.05 per unit of risk. If you would invest 63,682 in Cardinal Health, on October 12, 2024 and sell it today you would earn a total of 9,180 from holding Cardinal Health, or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cardinal Health, vs. HCA Healthcare,
Performance |
| Timeline |
| Cardinal Health, |
| HCA Healthcare, |
Cardinal Health, and HCA Healthcare, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health, and HCA Healthcare,
The main advantage of trading using opposite Cardinal Health, and HCA Healthcare, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health, position performs unexpectedly, HCA Healthcare, 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 HCA Healthcare, will offset losses from the drop in HCA Healthcare,'s long position.| Cardinal Health, vs. Warner Music Group | Cardinal Health, vs. Clover Health Investments, | Cardinal Health, vs. GP Investments | Cardinal Health, vs. G2D Investments |
| HCA Healthcare, vs. Charter Communications | HCA Healthcare, vs. JB Hunt Transport | HCA Healthcare, vs. Fresenius Medical Care | HCA Healthcare, vs. Taiwan Semiconductor Manufacturing |
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.
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