Correlation Between Cardinal Health and US Physical
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and US Physical 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 US Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and US Physical Therapy, you can compare the effects of market volatilities on Cardinal Health and US Physical 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 US Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and US Physical.
Diversification Opportunities for Cardinal Health and US Physical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and UPH is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and US Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physical Therapy 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 US Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physical Therapy has no effect on the direction of Cardinal Health i.e., Cardinal Health and US Physical go up and down completely randomly.
Pair Corralation between Cardinal Health and US Physical
Assuming the 90 days horizon Cardinal Health is expected to generate 0.74 times more return on investment than US Physical. However, Cardinal Health is 1.36 times less risky than US Physical. It trades about 0.16 of its potential returns per unit of risk. US Physical Therapy is currently generating about 0.03 per unit of risk. If you would invest 8,944 in Cardinal Health on November 7, 2024 and sell it today you would earn a total of 3,171 from holding Cardinal Health or generate 35.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Health vs. US Physical Therapy
Performance |
| Timeline |
| Cardinal Health |
| US Physical Therapy |
Cardinal Health and US Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Health and US Physical
The main advantage of trading using opposite Cardinal Health and US Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, US Physical 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 US Physical will offset losses from the drop in US Physical's long position.| Cardinal Health vs. Elmos Semiconductor SE | Cardinal Health vs. NXP Semiconductors NV | Cardinal Health vs. AEON METALS LTD | Cardinal Health vs. CORNISH METALS INC |
| US Physical vs. Take Two Interactive Software | US Physical vs. Check Point Software | US Physical vs. VITEC SOFTWARE GROUP | US Physical vs. Sekisui Chemical Co |
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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