Correlation Between Cardinal Health and Brickell Biotech
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Brickell Biotech 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 Brickell Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Brickell Biotech, you can compare the effects of market volatilities on Cardinal Health and Brickell Biotech 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 Brickell Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Brickell Biotech.
Diversification Opportunities for Cardinal Health and Brickell Biotech
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cardinal and Brickell is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Brickell Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickell Biotech 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 Brickell Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickell Biotech has no effect on the direction of Cardinal Health i.e., Cardinal Health and Brickell Biotech go up and down completely randomly.
Pair Corralation between Cardinal Health and Brickell Biotech
If you would invest 9,178 in Cardinal Health on September 12, 2024 and sell it today you would earn a total of 2,864 from holding Cardinal Health or generate 31.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.28% |
| Values | Daily Returns |
Cardinal Health vs. Brickell Biotech
Performance |
| Timeline |
| Cardinal Health |
| Brickell Biotech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cardinal Health and Brickell Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Brickell Biotech
The main advantage of trading using opposite Cardinal Health and Brickell Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Brickell Biotech 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 Brickell Biotech will offset losses from the drop in Brickell Biotech's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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