Correlation Between Cardinal Health and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and National CineMedia, you can compare the effects of market volatilities on Cardinal Health and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and National CineMedia.
Diversification Opportunities for Cardinal Health and National CineMedia
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and National is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Cardinal Health i.e., Cardinal Health and National CineMedia go up and down completely randomly.
Pair Corralation between Cardinal Health and National CineMedia
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.74 times more return on investment than National CineMedia. However, Cardinal Health is 1.34 times less risky than National CineMedia. It trades about 0.26 of its potential returns per unit of risk. National CineMedia is currently generating about -0.04 per unit of risk. If you would invest 10,852 in Cardinal Health on September 1, 2024 and sell it today you would earn a total of 1,372 from holding Cardinal Health or generate 12.64% 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. National CineMedia
Performance |
| Timeline |
| Cardinal Health |
| National CineMedia |
Cardinal Health and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and National CineMedia
The main advantage of trading using opposite Cardinal Health and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Cardinal Health vs. Humana Inc | Cardinal Health vs. Cigna Corp | Cardinal Health vs. Elevance Health | Cardinal Health vs. Centene Corp |
| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Kidoz Inc | National CineMedia vs. Marchex |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |