Correlation Between Cardinal Health and CDL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and CDL INVESTMENT 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 CDL INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and CDL INVESTMENT, you can compare the effects of market volatilities on Cardinal Health and CDL INVESTMENT 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 CDL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and CDL INVESTMENT.
Diversification Opportunities for Cardinal Health and CDL INVESTMENT
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cardinal and CDL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and CDL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDL INVESTMENT 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 CDL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDL INVESTMENT has no effect on the direction of Cardinal Health i.e., Cardinal Health and CDL INVESTMENT go up and down completely randomly.
Pair Corralation between Cardinal Health and CDL INVESTMENT
Assuming the 90 days horizon Cardinal Health is expected to generate 0.83 times more return on investment than CDL INVESTMENT. However, Cardinal Health is 1.2 times less risky than CDL INVESTMENT. It trades about 0.12 of its potential returns per unit of risk. CDL INVESTMENT is currently generating about 0.04 per unit of risk. If you would invest 10,212 in Cardinal Health on September 12, 2024 and sell it today you would earn a total of 1,383 from holding Cardinal Health or generate 13.54% 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. CDL INVESTMENT
Performance |
| Timeline |
| Cardinal Health |
| CDL INVESTMENT |
Cardinal Health and CDL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and CDL INVESTMENT
The main advantage of trading using opposite Cardinal Health and CDL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, CDL INVESTMENT 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 CDL INVESTMENT will offset losses from the drop in CDL INVESTMENT's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Superior Plus Corp | Cardinal Health vs. NMI Holdings | Cardinal Health vs. SIVERS SEMICONDUCTORS AB |
| CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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