Correlation Between Cardinal Health and Genfit
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Genfit 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 Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Genfit, you can compare the effects of market volatilities on Cardinal Health and Genfit 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 Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Genfit.
Diversification Opportunities for Cardinal Health and Genfit
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Genfit is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Cardinal Health i.e., Cardinal Health and Genfit go up and down completely randomly.
Pair Corralation between Cardinal Health and Genfit
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.46 times more return on investment than Genfit. However, Cardinal Health is 2.18 times less risky than Genfit. It trades about -0.21 of its potential returns per unit of risk. Genfit is currently generating about -0.44 per unit of risk. If you would invest 12,533 in Cardinal Health on September 14, 2024 and sell it today you would lose (787.00) from holding Cardinal Health or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Genfit
Performance |
| Timeline |
| Cardinal Health |
| Genfit |
Cardinal Health and Genfit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Genfit
The main advantage of trading using opposite Cardinal Health and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Genfit 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 Genfit will offset losses from the drop in Genfit's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Genfit vs. Puma Biotechnology | Genfit vs. Iovance Biotherapeutics | Genfit vs. Sarepta Therapeutics | Genfit vs. Day One Biopharmaceuticals |
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.
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