Correlation Between Cardinal Health and Owens Minor
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Owens Minor 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 Owens Minor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Owens Minor, you can compare the effects of market volatilities on Cardinal Health and Owens Minor 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 Owens Minor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Owens Minor.
Diversification Opportunities for Cardinal Health and Owens Minor
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Owens is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Owens Minor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Minor 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 Owens Minor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Minor has no effect on the direction of Cardinal Health i.e., Cardinal Health and Owens Minor go up and down completely randomly.
Pair Corralation between Cardinal Health and Owens Minor
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.42 times more return on investment than Owens Minor. However, Cardinal Health is 2.38 times less risky than Owens Minor. It trades about 0.2 of its potential returns per unit of risk. Owens Minor is currently generating about 0.05 per unit of risk. If you would invest 11,087 in Cardinal Health on August 27, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Owens Minor
Performance |
| Timeline |
| Cardinal Health |
| Owens Minor |
Cardinal Health and Owens Minor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Owens Minor
The main advantage of trading using opposite Cardinal Health and Owens Minor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Owens Minor 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 Owens Minor will offset losses from the drop in Owens Minor's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Owens Minor vs. Henry Schein | Owens Minor vs. Cardinal Health | Owens Minor vs. Zynex Inc | Owens Minor vs. Patterson Companies |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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