Correlation Between Cardinal Health and Continental
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Continental 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 Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Camden Property Trust, you can compare the effects of market volatilities on Cardinal Health and Continental 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 Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Continental.
Diversification Opportunities for Cardinal Health and Continental
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and Continental is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Camden Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden Property Trust 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 Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden Property Trust has no effect on the direction of Cardinal Health i.e., Cardinal Health and Continental go up and down completely randomly.
Pair Corralation between Cardinal Health and Continental
Assuming the 90 days horizon Cardinal Health is expected to generate 1.11 times more return on investment than Continental. However, Cardinal Health is 1.11 times more volatile than Camden Property Trust. It trades about -0.14 of its potential returns per unit of risk. Camden Property Trust is currently generating about -0.27 per unit of risk. If you would invest 11,625 in Cardinal Health on September 24, 2024 and sell it today you would lose (405.00) from holding Cardinal Health or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Camden Property Trust
Performance |
| Timeline |
| Cardinal Health |
| Camden Property Trust |
Cardinal Health and Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Continental
The main advantage of trading using opposite Cardinal Health and Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Continental 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 Continental will offset losses from the drop in Continental's long position.| Cardinal Health vs. AmerisourceBergen | Cardinal Health vs. Henry Schein | Cardinal Health vs. Shanghai Pharmaceuticals Holding | Cardinal Health vs. Sinopharm Group Co |
| Continental vs. DATAGROUP SE | Continental vs. Sabra Health Care | Continental vs. Cardinal Health | Continental vs. Automatic Data Processing |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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