Correlation Between Cardinal Health, and SL Green
Can any of the company-specific risk be diversified away by investing in both Cardinal Health, and SL Green 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 SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health, and SL Green Realty, you can compare the effects of market volatilities on Cardinal Health, and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health, and SL Green.
Diversification Opportunities for Cardinal Health, and SL Green
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and S1LG34 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health, and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Cardinal Health, i.e., Cardinal Health, and SL Green go up and down completely randomly.
Pair Corralation between Cardinal Health, and SL Green
Assuming the 90 days trading horizon Cardinal Health, is expected to generate 1.68 times less return on investment than SL Green. But when comparing it to its historical volatility, Cardinal Health, is 2.47 times less risky than SL Green. It trades about 0.1 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,409 in SL Green Realty on October 10, 2024 and sell it today you would earn a total of 11,625 from holding SL Green Realty or generate 138.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Cardinal Health, vs. SL Green Realty
Performance |
| Timeline |
| Cardinal Health, |
| SL Green Realty |
Cardinal Health, and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health, and SL Green
The main advantage of trading using opposite Cardinal Health, and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health, position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.| Cardinal Health, vs. Taiwan Semiconductor Manufacturing | Cardinal Health, vs. Apple Inc | Cardinal Health, vs. Alibaba Group Holding | Cardinal Health, vs. Banco Santander Chile |
| SL Green vs. Cardinal Health, | SL Green vs. Ross Stores | SL Green vs. Costco Wholesale | SL Green vs. United Airlines 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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