Correlation Between EDAP TMS and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both EDAP TMS and Cardinal Health 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 EDAP TMS and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDAP TMS SA and Cardinal Health, you can compare the effects of market volatilities on EDAP TMS and Cardinal Health 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 EDAP TMS with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and Cardinal Health.
Diversification Opportunities for EDAP TMS and Cardinal Health
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EDAP and Cardinal is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and EDAP TMS 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 EDAP TMS SA are associated (or correlated) with Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of EDAP TMS i.e., EDAP TMS and Cardinal Health go up and down completely randomly.
Pair Corralation between EDAP TMS and Cardinal Health
Given the investment horizon of 90 days EDAP TMS is expected to generate 1.45 times less return on investment than Cardinal Health. In addition to that, EDAP TMS is 4.31 times more volatile than Cardinal Health. It trades about 0.07 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.41 per unit of volatility. If you would invest 11,776 in Cardinal Health on November 1, 2024 and sell it today you would earn a total of 1,086 from holding Cardinal Health or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDAP TMS SA vs. Cardinal Health
Performance |
| Timeline |
| EDAP TMS SA |
| Cardinal Health |
EDAP TMS and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDAP TMS and Cardinal Health
The main advantage of trading using opposite EDAP TMS and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| EDAP TMS vs. Patterson Companies | EDAP TMS vs. Henry Schein | EDAP TMS vs. McKesson | EDAP TMS vs. Cardinal Health |
| Cardinal Health vs. Humana Inc | Cardinal Health vs. Cigna Corp | Cardinal Health vs. Elevance Health | Cardinal Health vs. Centene Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |