Correlation Between Cardinal Health and Permanent TSB
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Permanent TSB 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 Permanent TSB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Permanent TSB Group, you can compare the effects of market volatilities on Cardinal Health and Permanent TSB 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 Permanent TSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Permanent TSB.
Diversification Opportunities for Cardinal Health and Permanent TSB
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cardinal and Permanent is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Permanent TSB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permanent TSB Group 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 Permanent TSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permanent TSB Group has no effect on the direction of Cardinal Health i.e., Cardinal Health and Permanent TSB go up and down completely randomly.
Pair Corralation between Cardinal Health and Permanent TSB
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.4 times more return on investment than Permanent TSB. However, Cardinal Health is 2.51 times less risky than Permanent TSB. It trades about 0.08 of its potential returns per unit of risk. Permanent TSB Group is currently generating about -0.01 per unit of risk. If you would invest 7,522 in Cardinal Health on September 4, 2024 and sell it today you would earn a total of 4,725 from holding Cardinal Health or generate 62.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 45.66% |
| Values | Daily Returns |
Cardinal Health vs. Permanent TSB Group
Performance |
| Timeline |
| Cardinal Health |
| Permanent TSB Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cardinal Health and Permanent TSB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Permanent TSB
The main advantage of trading using opposite Cardinal Health and Permanent TSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Permanent TSB 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 Permanent TSB will offset losses from the drop in Permanent TSB's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Permanent TSB vs. LENSAR Inc | Permanent TSB vs. Ryman Hospitality Properties | Permanent TSB vs. Esperion Therapeutics | Permanent TSB vs. Sonida Senior Living |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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