Correlation Between CARDINAL HEALTH and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both CARDINAL HEALTH and Nordic Semiconductor 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 Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARDINAL HEALTH and Nordic Semiconductor ASA, you can compare the effects of market volatilities on CARDINAL HEALTH and Nordic Semiconductor 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 Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARDINAL HEALTH and Nordic Semiconductor.
Diversification Opportunities for CARDINAL HEALTH and Nordic Semiconductor
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CARDINAL and Nordic is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA 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 Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of CARDINAL HEALTH i.e., CARDINAL HEALTH and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between CARDINAL HEALTH and Nordic Semiconductor
Assuming the 90 days trading horizon CARDINAL HEALTH is expected to generate 2.05 times less return on investment than Nordic Semiconductor. But when comparing it to its historical volatility, CARDINAL HEALTH is 1.55 times less risky than Nordic Semiconductor. It trades about 0.68 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.9 of returns per unit of risk over similar time horizon. If you would invest 847.00 in Nordic Semiconductor ASA on October 25, 2024 and sell it today you would earn a total of 144.00 from holding Nordic Semiconductor ASA or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARDINAL HEALTH vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| CARDINAL HEALTH |
| Nordic Semiconductor ASA |
CARDINAL HEALTH and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARDINAL HEALTH and Nordic Semiconductor
The main advantage of trading using opposite CARDINAL HEALTH and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARDINAL HEALTH position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| CARDINAL HEALTH vs. Zoom Video Communications | CARDINAL HEALTH vs. Planet Fitness | CARDINAL HEALTH vs. New Residential Investment | CARDINAL HEALTH vs. OPKO HEALTH |
| Nordic Semiconductor vs. NVIDIA | Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Broadcom | Nordic Semiconductor vs. QUALCOMM Incorporated |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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