Correlation Between Cardinal Health and Primary Health
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Primary 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 Cardinal Health and Primary Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Primary Health Properties, you can compare the effects of market volatilities on Cardinal Health and Primary 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 Cardinal Health with a short position of Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Primary Health.
Diversification Opportunities for Cardinal Health and Primary Health
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and Primary is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Cardinal Health i.e., Cardinal Health and Primary Health go up and down completely randomly.
Pair Corralation between Cardinal Health and Primary Health
Assuming the 90 days trading horizon Cardinal Health is expected to generate 1.08 times less return on investment than Primary Health. But when comparing it to its historical volatility, Cardinal Health is 1.05 times less risky than Primary Health. It trades about 0.05 of its potential returns per unit of risk. Primary Health Properties is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,192 in Primary Health Properties on November 3, 2024 and sell it today you would earn a total of 228.00 from holding Primary Health Properties or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Cardinal Health vs. Primary Health Properties
Performance |
| Timeline |
| Cardinal Health |
| Primary Health Properties |
Cardinal Health and Primary Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Primary Health
The main advantage of trading using opposite Cardinal Health and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Primary 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 Primary Health will offset losses from the drop in Primary Health's long position.| Cardinal Health vs. Ion Beam Applications | Cardinal Health vs. Datalogic | Cardinal Health vs. Teradata Corp | Cardinal Health vs. Public Storage |
| Primary Health vs. Jacquet Metal Service | Primary Health vs. GreenX Metals | Primary Health vs. Martin Marietta Materials | Primary Health vs. GoldMining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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