Correlation Between Cardinal Health and Danaher
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Danaher 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 Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Danaher, you can compare the effects of market volatilities on Cardinal Health and Danaher 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 Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Danaher.
Diversification Opportunities for Cardinal Health and Danaher
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cardinal and Danaher is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher 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 Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of Cardinal Health i.e., Cardinal Health and Danaher go up and down completely randomly.
Pair Corralation between Cardinal Health and Danaher
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.89 times more return on investment than Danaher. However, Cardinal Health is 1.12 times less risky than Danaher. It trades about 0.06 of its potential returns per unit of risk. Danaher is currently generating about -0.02 per unit of risk. If you would invest 10,303 in Cardinal Health on November 5, 2024 and sell it today you would earn a total of 2,063 from holding Cardinal Health or generate 20.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Danaher
Performance |
| Timeline |
| Cardinal Health |
| Danaher |
Cardinal Health and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Danaher
The main advantage of trading using opposite Cardinal Health and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| Cardinal Health vs. Pennant Group | Cardinal Health vs. The Ensign Group | Cardinal Health vs. Encompass Health Corp | Cardinal Health vs. Healthcare Services Group |
| Danaher vs. Agilent Technologies | Danaher vs. Illumina | Danaher vs. IDEXX Laboratories | Danaher vs. Waters |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |