Correlation Between PennantPark Floating and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating 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 PennantPark Floating and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Floating Rate and Cardinal Health, you can compare the effects of market volatilities on PennantPark Floating 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 PennantPark Floating with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Cardinal Health.
Diversification Opportunities for PennantPark Floating and Cardinal Health
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Cardinal is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and PennantPark Floating 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 PennantPark Floating Rate 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 PennantPark Floating i.e., PennantPark Floating and Cardinal Health go up and down completely randomly.
Pair Corralation between PennantPark Floating and Cardinal Health
Given the investment horizon of 90 days PennantPark Floating is expected to generate 2.27 times less return on investment than Cardinal Health. But when comparing it to its historical volatility, PennantPark Floating Rate is 1.61 times less risky than Cardinal Health. It trades about 0.04 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Cardinal Health
Performance |
| Timeline |
| PennantPark Floating Rate |
| Cardinal Health |
PennantPark Floating and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Cardinal Health
The main advantage of trading using opposite PennantPark Floating and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating 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.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Associated Capital Group | PennantPark Floating vs. Brookfield Corp |
| Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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