Correlation Between Cardinal Health and Hologic
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Hologic 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 Hologic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Hologic, you can compare the effects of market volatilities on Cardinal Health and Hologic 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 Hologic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Hologic.
Diversification Opportunities for Cardinal Health and Hologic
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Hologic is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Hologic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hologic 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 Hologic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hologic has no effect on the direction of Cardinal Health i.e., Cardinal Health and Hologic go up and down completely randomly.
Pair Corralation between Cardinal Health and Hologic
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.92 times more return on investment than Hologic. However, Cardinal Health is 1.09 times less risky than Hologic. It trades about 0.12 of its potential returns per unit of risk. Hologic is currently generating about -0.19 per unit of risk. If you would invest 12,195 in Cardinal Health on November 1, 2024 and sell it today you would earn a total of 631.00 from holding Cardinal Health or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Hologic
Performance |
| Timeline |
| Cardinal Health |
| Hologic |
Cardinal Health and Hologic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Hologic
The main advantage of trading using opposite Cardinal Health and Hologic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Hologic 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 Hologic will offset losses from the drop in Hologic's long position.| Cardinal Health vs. Humana Inc | Cardinal Health vs. Cigna Corp | Cardinal Health vs. Elevance Health | Cardinal Health vs. Centene Corp |
| Hologic vs. Haemonetics | Hologic vs. ICU Medical | Hologic vs. Envista Holdings Corp | Hologic vs. The Cooper 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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