Correlation Between Cardinal Health and KROGER

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

By analyzing existing cross correlation between Cardinal Health and KROGER 515 percent, you can compare the effects of market volatilities on Cardinal Health and KROGER 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 KROGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and KROGER.

Diversification Opportunities for Cardinal Health and KROGER

-0.61

Correlation Coefficient

Cardinal Health  KROGER

Excellent diversification

The 3 months correlation between Cardinal and KROGER is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and KROGER 515 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KROGER 515 percent 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 KROGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KROGER 515 percent has no effect on the direction of Cardinal Health i.e., Cardinal Health and KROGER go up and down completely randomly.

Pair Corralation between Cardinal Health and KROGER

Considering the 90-day investment horizon Cardinal Health is expected to generate 0.94 times more return on investment than KROGER. However, Cardinal Health is 1.06 times less risky than KROGER. It trades about 0.35 of its potential returns per unit of risk. KROGER 515 percent is currently generating about -0.13 per unit of risk. If you would invest  11,190  in Cardinal Health on September 5, 2024 and sell it today you would earn a total of  1,334  from holding Cardinal Health or generate 11.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.82%
Values	Daily Returns

Cardinal Health  vs.  KROGER 515 percent

Cardinal Health

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Cardinal Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

KROGER 515 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KROGER 515 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KROGER 515 percent investors.

Pair Trading with Cardinal Health and KROGER

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

The idea behind Cardinal Health and KROGER 515 percent 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.