Correlation Between Cardinal Health and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Cardinal Health and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and MEDICAL FACILITIES.
Diversification Opportunities for Cardinal Health and MEDICAL FACILITIES
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and MEDICAL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Cardinal Health i.e., Cardinal Health and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Cardinal Health and MEDICAL FACILITIES
Assuming the 90 days horizon Cardinal Health is expected to generate 1.4 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, Cardinal Health is 1.75 times less risky than MEDICAL FACILITIES. It trades about 0.09 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 505.00 in MEDICAL FACILITIES NEW on December 11, 2024 and sell it today you would earn a total of 575.00 from holding MEDICAL FACILITIES NEW or generate 113.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Cardinal Health |
| MEDICAL FACILITIES NEW |
Cardinal Health and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and MEDICAL FACILITIES
The main advantage of trading using opposite Cardinal Health and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Cardinal Health vs. Ping An Insurance | Cardinal Health vs. Molson Coors Beverage | Cardinal Health vs. Monster Beverage Corp | Cardinal Health vs. REVO INSURANCE SPA |
| MEDICAL FACILITIES vs. Zijin Mining Group | MEDICAL FACILITIES vs. Gaztransport Technigaz SA | MEDICAL FACILITIES vs. PARKEN Sport Entertainment | MEDICAL FACILITIES vs. Jacquet Metal Service |
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.
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