Correlation Between Cardinal Health and Murano Global

Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Murano Global 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 Murano Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardinal Health and Murano Global Investments, you can compare the effects of market volatilities on Cardinal Health and Murano Global 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 Murano Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Murano Global.

Diversification Opportunities for Cardinal Health and Murano Global

0.59

Correlation Coefficient

Cardinal Health  Murano Global

Very weak diversification

The 3 months correlation between Cardinal and Murano is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Murano Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murano Global Investments 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 Murano Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murano Global Investments has no effect on the direction of Cardinal Health i.e., Cardinal Health and Murano Global go up and down completely randomly.

Pair Corralation between Cardinal Health and Murano Global

Considering the 90-day investment horizon Cardinal Health is expected to generate 2.58 times less return on investment than Murano Global. But when comparing it to its historical volatility, Cardinal Health is 5.58 times less risky than Murano Global. It trades about 0.17 of its potential returns per unit of risk. Murano Global Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Murano Global Investments on October 25, 2024 and sell it today you would earn a total of  3.00  from holding Murano Global Investments or generate 17.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.33%
Values	Daily Returns

Cardinal Health  vs.  Murano Global Investments

Cardinal Health

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Cardinal Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Murano Global Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Murano Global Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Murano Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardinal Health and Murano Global

The main advantage of trading using opposite Cardinal Health and Murano Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Murano Global 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 Murano Global will offset losses from the drop in Murano Global's long position.

The idea behind Cardinal Health and Murano Global Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.