Correlation Between Cardinal Health and CAVA Group,
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and CAVA Group, 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 CAVA Group, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and CAVA Group,, you can compare the effects of market volatilities on Cardinal Health and CAVA Group, 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 CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and CAVA Group,.
Diversification Opportunities for Cardinal Health and CAVA Group,
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and CAVA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Cardinal Health i.e., Cardinal Health and CAVA Group, go up and down completely randomly.
Pair Corralation between Cardinal Health and CAVA Group,
Considering the 90-day investment horizon Cardinal Health is expected to generate 3.8 times less return on investment than CAVA Group,. But when comparing it to its historical volatility, Cardinal Health is 2.55 times less risky than CAVA Group,. It trades about 0.06 of its potential returns per unit of risk. CAVA Group, is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,956 in CAVA Group, on September 12, 2024 and sell it today you would earn a total of 7,783 from holding CAVA Group, or generate 157.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. CAVA Group,
Performance |
| Timeline |
| Cardinal Health |
| CAVA Group, |
Cardinal Health and CAVA Group, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and CAVA Group,
The main advantage of trading using opposite Cardinal Health and CAVA Group, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, CAVA Group, 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 CAVA Group, will offset losses from the drop in CAVA Group,'s long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| CAVA Group, vs. Grupo Aeroportuario del | CAVA Group, vs. Eastern Co | CAVA Group, vs. HF Sinclair Corp | CAVA Group, vs. Finnair Oyj |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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