Correlation Between Cardinal Health and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Phibro Animal 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 Phibro Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Phibro Animal Health, you can compare the effects of market volatilities on Cardinal Health and Phibro Animal 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 Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Phibro Animal.
Diversification Opportunities for Cardinal Health and Phibro Animal
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cardinal and Phibro is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Phibro Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phibro Animal Health 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 Phibro Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phibro Animal Health has no effect on the direction of Cardinal Health i.e., Cardinal Health and Phibro Animal go up and down completely randomly.
Pair Corralation between Cardinal Health and Phibro Animal
Assuming the 90 days horizon Cardinal Health is expected to generate 0.66 times more return on investment than Phibro Animal. However, Cardinal Health is 1.51 times less risky than Phibro Animal. It trades about 0.29 of its potential returns per unit of risk. Phibro Animal Health is currently generating about 0.01 per unit of risk. If you would invest 11,335 in Cardinal Health on October 28, 2024 and sell it today you would earn a total of 980.00 from holding Cardinal Health or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. Phibro Animal Health
Performance |
| Timeline |
| Cardinal Health |
| Phibro Animal Health |
Cardinal Health and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and Phibro Animal
The main advantage of trading using opposite Cardinal Health and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Phibro Animal 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 Phibro Animal will offset losses from the drop in Phibro Animal's long position.| Cardinal Health vs. Henry Schein | Cardinal Health vs. Shanghai Pharmaceuticals Holding | Cardinal Health vs. Sinopharm Group Co |
| Phibro Animal vs. Merck Company | Phibro Animal vs. Takeda Pharmaceutical | Phibro Animal vs. HANSOH PHARMAC HD 00001 | Phibro Animal vs. Guangzhou Baiyunshan Pharmaceutical |
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 Directory module to find actively traded commodities issued by global exchanges.
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