Correlation Between Cardinal Health and Genus Plc
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Genus Plc 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 Genus Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Genus plc, you can compare the effects of market volatilities on Cardinal Health and Genus Plc 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 Genus Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Genus Plc.
Diversification Opportunities for Cardinal Health and Genus Plc
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and Genus is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Genus plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genus plc 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 Genus Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genus plc has no effect on the direction of Cardinal Health i.e., Cardinal Health and Genus Plc go up and down completely randomly.
Pair Corralation between Cardinal Health and Genus Plc
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.8 times more return on investment than Genus Plc. However, Cardinal Health is 1.26 times less risky than Genus Plc. It trades about 0.08 of its potential returns per unit of risk. Genus plc is currently generating about -0.05 per unit of risk. If you would invest 7,524 in Cardinal Health on September 5, 2024 and sell it today you would earn a total of 4,803 from holding Cardinal Health or generate 63.84% 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. Genus plc
Performance |
| Timeline |
| Cardinal Health |
| Genus plc |
Cardinal Health and Genus Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Genus Plc
The main advantage of trading using opposite Cardinal Health and Genus Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Genus Plc 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 Genus Plc will offset losses from the drop in Genus Plc's long position.| Cardinal Health vs. Humana Inc | Cardinal Health vs. Elevance Health | Cardinal Health vs. UnitedHealth Group Incorporated | Cardinal Health vs. Molina Healthcare |
| Genus Plc vs. Cardinal Health | Genus Plc vs. Verra Mobility Corp | Genus Plc vs. Old Dominion Freight | Genus Plc vs. TFI International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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