Correlation Between Fresenius Medical and Cardinal Health,

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

By analyzing existing cross correlation between Fresenius Medical Care and Cardinal Health,, you can compare the effects of market volatilities on Fresenius Medical 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 Fresenius Medical with a short position of Cardinal Health,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Cardinal Health,.

Diversification Opportunities for Fresenius Medical and Cardinal Health,

-0.23

Correlation Coefficient

Fresenius Medical  Cardinal Health,

Very good diversification

The 3 months correlation between Fresenius and Cardinal is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Cardinal Health, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health, and Fresenius Medical 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 Fresenius Medical Care 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 Fresenius Medical i.e., Fresenius Medical and Cardinal Health, go up and down completely randomly.

Pair Corralation between Fresenius Medical and Cardinal Health,

Assuming the 90 days trading horizon Fresenius Medical Care is expected to under-perform the Cardinal Health,. But the stock apears to be less risky and, when comparing its historical volatility, Fresenius Medical Care is 3.84 times less risky than Cardinal Health,. The stock trades about -0.13 of its potential returns per unit of risk. The Cardinal Health, is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  60,010  in Cardinal Health, on October 7, 2024 and sell it today you would earn a total of  11,490  from holding Cardinal Health, or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fresenius Medical Care  vs.  Cardinal Health,

Fresenius Medical Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresenius Medical Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fresenius Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cardinal Health,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cardinal Health, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fresenius Medical and Cardinal Health,

The main advantage of trading using opposite Fresenius Medical and Cardinal Health, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical 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.

The idea behind Fresenius Medical Care and Cardinal Health, 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.