Correlation Between Cardinal Health and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Regions Financial 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 Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Regions Financial, you can compare the effects of market volatilities on Cardinal Health and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Regions Financial.
Diversification Opportunities for Cardinal Health and Regions Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cardinal and Regions is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Cardinal Health i.e., Cardinal Health and Regions Financial go up and down completely randomly.
Pair Corralation between Cardinal Health and Regions Financial
Considering the 90-day investment horizon Cardinal Health is expected to generate 3.24 times more return on investment than Regions Financial. However, Cardinal Health is 3.24 times more volatile than Regions Financial. It trades about 0.05 of its potential returns per unit of risk. Regions Financial is currently generating about 0.15 per unit of risk. If you would invest 10,494 in Cardinal Health on September 4, 2024 and sell it today you would earn a total of 1,833 from holding Cardinal Health or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.46% |
| Values | Daily Returns |
Cardinal Health vs. Regions Financial
Performance |
| Timeline |
| Cardinal Health |
| Regions Financial |
Cardinal Health and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Regions Financial
The main advantage of trading using opposite Cardinal Health and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
| Regions Financial vs. Aldel Financial II | Regions Financial vs. Weibo Corp | Regions Financial vs. Barrick Gold Corp | Regions Financial vs. Inflection Point Acquisition |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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