Correlation Between Cardinal Health and Juniata Valley

Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Juniata Valley 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 Juniata Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardinal Health and Juniata Valley Financial, you can compare the effects of market volatilities on Cardinal Health and Juniata Valley 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 Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Juniata Valley.

Diversification Opportunities for Cardinal Health and Juniata Valley

-0.28

Correlation Coefficient

Cardinal Health  Juniata Valley

Very good diversification

The 3 months correlation between Cardinal and Juniata is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Cardinal Health i.e., Cardinal Health and Juniata Valley go up and down completely randomly.

Pair Corralation between Cardinal Health and Juniata Valley

Considering the 90-day investment horizon Cardinal Health is expected to generate 0.46 times more return on investment than Juniata Valley. However, Cardinal Health is 2.16 times less risky than Juniata Valley. It trades about 0.19 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about -0.03 per unit of risk. If you would invest  11,650  in Cardinal Health on December 19, 2024 and sell it today you would earn a total of  1,496  from holding Cardinal Health or generate 12.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Cardinal Health  vs.  Juniata Valley Financial

Cardinal Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Cardinal Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Juniata Valley Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Juniata Valley Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cardinal Health and Juniata Valley

The main advantage of trading using opposite Cardinal Health and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Juniata Valley 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 Juniata Valley will offset losses from the drop in Juniata Valley's long position.

The idea behind Cardinal Health and Juniata Valley Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.