Correlation Between Cardinal Health and Goosehead Insurance
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Goosehead Insurance 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 Goosehead Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Goosehead Insurance, you can compare the effects of market volatilities on Cardinal Health and Goosehead Insurance 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 Goosehead Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Goosehead Insurance.
Diversification Opportunities for Cardinal Health and Goosehead Insurance
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cardinal and Goosehead is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Goosehead Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goosehead Insurance 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 Goosehead Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goosehead Insurance has no effect on the direction of Cardinal Health i.e., Cardinal Health and Goosehead Insurance go up and down completely randomly.
Pair Corralation between Cardinal Health and Goosehead Insurance
Considering the 90-day investment horizon Cardinal Health is expected to generate 1.76 times less return on investment than Goosehead Insurance. But when comparing it to its historical volatility, Cardinal Health is 2.09 times less risky than Goosehead Insurance. It trades about 0.14 of its potential returns per unit of risk. Goosehead Insurance is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,109 in Goosehead Insurance on November 4, 2024 and sell it today you would earn a total of 608.00 from holding Goosehead Insurance or generate 6.01% 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. Goosehead Insurance
Performance |
| Timeline |
| Cardinal Health |
| Goosehead Insurance |
Cardinal Health and Goosehead Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Goosehead Insurance
The main advantage of trading using opposite Cardinal Health and Goosehead Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Goosehead Insurance 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 Goosehead Insurance will offset losses from the drop in Goosehead Insurance's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Goosehead Insurance vs. Enstar Group Limited | Goosehead Insurance vs. Waterdrop ADR | Goosehead Insurance vs. Axa Equitable Holdings | Goosehead Insurance vs. Hartford Financial Services |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |