Correlation Between Cardinal Health and Mind Medicine
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Mind Medicine 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 Mind Medicine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Mind Medicine, you can compare the effects of market volatilities on Cardinal Health and Mind Medicine 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 Mind Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Mind Medicine.
Diversification Opportunities for Cardinal Health and Mind Medicine
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cardinal and Mind is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Mind Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Medicine 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 Mind Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Medicine has no effect on the direction of Cardinal Health i.e., Cardinal Health and Mind Medicine go up and down completely randomly.
Pair Corralation between Cardinal Health and Mind Medicine
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.29 times more return on investment than Mind Medicine. However, Cardinal Health is 3.43 times less risky than Mind Medicine. It trades about -0.21 of its potential returns per unit of risk. Mind Medicine is currently generating about -0.15 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Mind Medicine
Performance |
| Timeline |
| Cardinal Health |
| Mind Medicine |
Cardinal Health and Mind Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Mind Medicine
The main advantage of trading using opposite Cardinal Health and Mind Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Mind Medicine 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 Mind Medicine will offset losses from the drop in Mind Medicine's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Mind Medicine vs. Cybin Inc | Mind Medicine vs. GH Research PLC | Mind Medicine vs. Awakn Life Sciences | Mind Medicine vs. ATAI Life Sciences |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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