Correlation Between Cardinal Health and Arhaus
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Arhaus 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 Arhaus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Arhaus Inc, you can compare the effects of market volatilities on Cardinal Health and Arhaus 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 Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Arhaus.
Diversification Opportunities for Cardinal Health and Arhaus
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cardinal and Arhaus is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc 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 Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Cardinal Health i.e., Cardinal Health and Arhaus go up and down completely randomly.
Pair Corralation between Cardinal Health and Arhaus
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.21 times more return on investment than Arhaus. However, Cardinal Health is 4.85 times less risky than Arhaus. It trades about 0.34 of its potential returns per unit of risk. Arhaus Inc is currently generating about -0.24 per unit of risk. If you would invest 11,692 in Cardinal Health on October 12, 2024 and sell it today you would earn a total of 561.00 from holding Cardinal Health or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Arhaus Inc
Performance |
| Timeline |
| Cardinal Health |
| Arhaus Inc |
Cardinal Health and Arhaus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Arhaus
The main advantage of trading using opposite Cardinal Health and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Arhaus vs. Floor Decor Holdings | Arhaus vs. Live Ventures | Arhaus vs. Haverty Furniture Companies | Arhaus vs. Haverty Furniture Companies |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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