Correlation Between Cardinal Health and Bluejay Diagnostics
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Bluejay Diagnostics 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 Bluejay Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Bluejay Diagnostics, you can compare the effects of market volatilities on Cardinal Health and Bluejay Diagnostics 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 Bluejay Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Bluejay Diagnostics.
Diversification Opportunities for Cardinal Health and Bluejay Diagnostics
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Bluejay is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics 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 Bluejay Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluejay Diagnostics has no effect on the direction of Cardinal Health i.e., Cardinal Health and Bluejay Diagnostics go up and down completely randomly.
Pair Corralation between Cardinal Health and Bluejay Diagnostics
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.1 times more return on investment than Bluejay Diagnostics. However, Cardinal Health is 9.79 times less risky than Bluejay Diagnostics. It trades about 0.2 of its potential returns per unit of risk. Bluejay Diagnostics is currently generating about 0.02 per unit of risk. If you would invest 11,087 in Cardinal Health on August 28, 2024 and sell it today you would earn a total of 1,090 from holding Cardinal Health or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Bluejay Diagnostics
Performance |
| Timeline |
| Cardinal Health |
| Bluejay Diagnostics |
Cardinal Health and Bluejay Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Bluejay Diagnostics
The main advantage of trading using opposite Cardinal Health and Bluejay Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Bluejay Diagnostics 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 Bluejay Diagnostics will offset losses from the drop in Bluejay Diagnostics' long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Bluejay Diagnostics vs. Bone Biologics Corp | Bluejay Diagnostics vs. Nuwellis | Bluejay Diagnostics vs. Heart Test Laboratories | Bluejay Diagnostics vs. Tivic Health Systems |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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