Correlation Between Cardinal Health and Orange SA
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Orange SA 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 Orange SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Orange SA, you can compare the effects of market volatilities on Cardinal Health and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Orange SA.
Diversification Opportunities for Cardinal Health and Orange SA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Orange is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Orange SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA has no effect on the direction of Cardinal Health i.e., Cardinal Health and Orange SA go up and down completely randomly.
Pair Corralation between Cardinal Health and Orange SA
Assuming the 90 days horizon Cardinal Health is expected to generate 1.44 times more return on investment than Orange SA. However, Cardinal Health is 1.44 times more volatile than Orange SA. It trades about 0.05 of its potential returns per unit of risk. Orange SA is currently generating about -0.01 per unit of risk. If you would invest 9,306 in Cardinal Health on September 14, 2024 and sell it today you would earn a total of 1,864 from holding Cardinal Health or generate 20.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Orange SA
Performance |
| Timeline |
| Cardinal Health |
| Orange SA |
Cardinal Health and Orange SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Orange SA
The main advantage of trading using opposite Cardinal Health and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA'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 |
| Orange SA vs. Bumrungrad Hospital Public | Orange SA vs. Lion Biotechnologies | Orange SA vs. Cardinal Health | Orange SA vs. AAC TECHNOLOGHLDGADR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |