Correlation Between Cardinal Health and IsoRay
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and IsoRay 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 IsoRay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and IsoRay Inc, you can compare the effects of market volatilities on Cardinal Health and IsoRay 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 IsoRay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and IsoRay.
Diversification Opportunities for Cardinal Health and IsoRay
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and IsoRay is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and IsoRay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IsoRay Inc 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 IsoRay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IsoRay Inc has no effect on the direction of Cardinal Health i.e., Cardinal Health and IsoRay go up and down completely randomly.
Pair Corralation between Cardinal Health and IsoRay
If you would invest 11,190 in Cardinal Health on September 4, 2024 and sell it today you would earn a total of 1,057 from holding Cardinal Health or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Cardinal Health vs. IsoRay Inc
Performance |
| Timeline |
| Cardinal Health |
| IsoRay Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cardinal Health and IsoRay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and IsoRay
The main advantage of trading using opposite Cardinal Health and IsoRay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, IsoRay 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 IsoRay will offset losses from the drop in IsoRay's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| IsoRay vs. Where Food Comes | IsoRay vs. Origin Materials | IsoRay vs. Ecolab Inc | IsoRay vs. Stepan Company |
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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