Correlation Between Cardinal Health and Bellevue Healthcare
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Bellevue Healthcare 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 Bellevue Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Bellevue Healthcare Trust, you can compare the effects of market volatilities on Cardinal Health and Bellevue Healthcare 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 Bellevue Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Bellevue Healthcare.
Diversification Opportunities for Cardinal Health and Bellevue Healthcare
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cardinal and Bellevue is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Bellevue Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Healthcare Trust 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 Bellevue Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Healthcare Trust has no effect on the direction of Cardinal Health i.e., Cardinal Health and Bellevue Healthcare go up and down completely randomly.
Pair Corralation between Cardinal Health and Bellevue Healthcare
Assuming the 90 days trading horizon Cardinal Health is expected to generate 1.25 times more return on investment than Bellevue Healthcare. However, Cardinal Health is 1.25 times more volatile than Bellevue Healthcare Trust. It trades about 0.23 of its potential returns per unit of risk. Bellevue Healthcare Trust is currently generating about 0.05 per unit of risk. If you would invest 12,005 in Cardinal Health on November 7, 2024 and sell it today you would earn a total of 694.00 from holding Cardinal Health or generate 5.78% 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. Bellevue Healthcare Trust
Performance |
| Timeline |
| Cardinal Health |
| Bellevue Healthcare Trust |
Cardinal Health and Bellevue Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Bellevue Healthcare
The main advantage of trading using opposite Cardinal Health and Bellevue Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Bellevue Healthcare 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 Bellevue Healthcare will offset losses from the drop in Bellevue Healthcare's long position.| Cardinal Health vs. Jacquet Metal Service | Cardinal Health vs. Cornish Metals | Cardinal Health vs. Applied Materials | Cardinal Health vs. Tata Steel Limited |
| Bellevue Healthcare vs. Eastman Chemical Co | Bellevue Healthcare vs. MTI Wireless Edge | Bellevue Healthcare vs. Mineral Financial Investments | Bellevue Healthcare vs. New Residential 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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