Correlation Between Cardinal Health and NH Foods
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and NH Foods 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 NH Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and NH Foods Ltd, you can compare the effects of market volatilities on Cardinal Health and NH Foods 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 NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and NH Foods.
Diversification Opportunities for Cardinal Health and NH Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cardinal and NIPMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and NH Foods Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods 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 NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of Cardinal Health i.e., Cardinal Health and NH Foods go up and down completely randomly.
Pair Corralation between Cardinal Health and NH Foods
If you would invest 11,087 in Cardinal Health on August 28, 2024 and sell it today you would earn a total of 1,090 from holding Cardinal Health or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. NH Foods Ltd
Performance |
| Timeline |
| Cardinal Health |
| NH Foods |
Cardinal Health and NH Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and NH Foods
The main advantage of trading using opposite Cardinal Health and NH Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, NH Foods 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 NH Foods will offset losses from the drop in NH Foods' long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| NH Foods vs. Artisan Consumer Goods | NH Foods vs. The A2 Milk | NH Foods vs. BioAdaptives | NH Foods vs. General Mills |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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