Correlation Between Cardinal Health and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and CN MODERN 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 CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and CN MODERN DAIRY, you can compare the effects of market volatilities on Cardinal Health and CN MODERN 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 CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and CN MODERN.
Diversification Opportunities for Cardinal Health and CN MODERN
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cardinal and 07M is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY 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 CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Cardinal Health i.e., Cardinal Health and CN MODERN go up and down completely randomly.
Pair Corralation between Cardinal Health and CN MODERN
Assuming the 90 days horizon Cardinal Health is expected to generate 0.37 times more return on investment than CN MODERN. However, Cardinal Health is 2.73 times less risky than CN MODERN. It trades about 0.29 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about -0.11 per unit of risk. If you would invest 11,275 in Cardinal Health on October 24, 2024 and sell it today you would earn a total of 890.00 from holding Cardinal Health or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. CN MODERN DAIRY
Performance |
| Timeline |
| Cardinal Health |
| CN MODERN DAIRY |
Cardinal Health and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and CN MODERN
The main advantage of trading using opposite Cardinal Health and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Cardinal Health vs. STEEL DYNAMICS | Cardinal Health vs. ANGANG STEEL H | Cardinal Health vs. KOBE STEEL LTD | Cardinal Health vs. PULSION Medical Systems |
| CN MODERN vs. CLEAN ENERGY FUELS | CN MODERN vs. PLAYTECH | CN MODERN vs. Ultra Clean Holdings | CN MODERN vs. Gaming and Leisure |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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