Correlation Between Cardinal Health and Oasis Petroleum
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Oasis Petroleum 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 Oasis Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Oasis Petroleum, you can compare the effects of market volatilities on Cardinal Health and Oasis Petroleum 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 Oasis Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Oasis Petroleum.
Diversification Opportunities for Cardinal Health and Oasis Petroleum
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Oasis is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Oasis Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Petroleum 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 Oasis Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Petroleum has no effect on the direction of Cardinal Health i.e., Cardinal Health and Oasis Petroleum go up and down completely randomly.
Pair Corralation between Cardinal Health and Oasis Petroleum
Considering the 90-day investment horizon Cardinal Health is expected to under-perform the Oasis Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Cardinal Health is 3.6 times less risky than Oasis Petroleum. The stock trades about -0.21 of its potential returns per unit of risk. The Oasis Petroleum is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,335 in Oasis Petroleum on September 14, 2024 and sell it today you would earn a total of 166.00 from holding Oasis Petroleum or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 23.81% |
| Values | Daily Returns |
Cardinal Health vs. Oasis Petroleum
Performance |
| Timeline |
| Cardinal Health |
| Oasis Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cardinal Health and Oasis Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Oasis Petroleum
The main advantage of trading using opposite Cardinal Health and Oasis Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Oasis Petroleum 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 Oasis Petroleum will offset losses from the drop in Oasis Petroleum's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Oasis Petroleum vs. Park Hotels Resorts | Oasis Petroleum vs. Getty Realty | Oasis Petroleum vs. Bt Brands | Oasis Petroleum vs. Cardinal Health |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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