Correlation Between Cardinal Health and Western Copper
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Western Copper 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 Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Western Copper and, you can compare the effects of market volatilities on Cardinal Health and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Western Copper.
Diversification Opportunities for Cardinal Health and Western Copper
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and Western is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Cardinal Health i.e., Cardinal Health and Western Copper go up and down completely randomly.
Pair Corralation between Cardinal Health and Western Copper
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.34 times more return on investment than Western Copper. However, Cardinal Health is 2.93 times less risky than Western Copper. It trades about 0.41 of its potential returns per unit of risk. Western Copper and is currently generating about -0.04 per unit of risk. If you would invest 11,777 in Cardinal Health on October 21, 2024 and sell it today you would earn a total of 850.00 from holding Cardinal Health or generate 7.22% 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. Western Copper and
Performance |
| Timeline |
| Cardinal Health |
| Western Copper |
Cardinal Health and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Western Copper
The main advantage of trading using opposite Cardinal Health and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Cardinal Health vs. Cigna Corp | Cardinal Health vs. Definitive Healthcare Corp | Cardinal Health vs. Edwards Lifesciences Corp | Cardinal Health vs. Guardant Health |
| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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