Correlation Between NH Foods and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both NH Foods and Cardinal Health 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 NH Foods and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods Ltd and Cardinal Health, you can compare the effects of market volatilities on NH Foods and Cardinal Health 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 NH Foods with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and Cardinal Health.
Diversification Opportunities for NH Foods and Cardinal Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIPMY and Cardinal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and NH Foods 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 NH Foods Ltd are associated (or correlated) with Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of NH Foods i.e., NH Foods and Cardinal Health go up and down completely randomly.
Pair Corralation between NH Foods and Cardinal Health
Assuming the 90 days horizon NH Foods is expected to generate 2.11 times less return on investment than Cardinal Health. But when comparing it to its historical volatility, NH Foods Ltd is 2.31 times less risky than Cardinal Health. It trades about 0.09 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,476 in Cardinal Health on August 31, 2024 and sell it today you would earn a total of 4,748 from holding Cardinal Health or generate 63.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
NH Foods Ltd vs. Cardinal Health
Performance |
| Timeline |
| NH Foods |
| Cardinal Health |
NH Foods and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and Cardinal Health
The main advantage of trading using opposite NH Foods and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| NH Foods vs. The A2 Milk | NH Foods vs. Altavoz Entertainment | NH Foods vs. Artisan Consumer Goods | NH Foods vs. General Mills |
| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |