Correlation Between Cardinal Health and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both Cardinal Health and Proficient Auto 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 Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Health and Proficient Auto Logistics,, you can compare the effects of market volatilities on Cardinal Health and Proficient Auto 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 Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Health and Proficient Auto.
Diversification Opportunities for Cardinal Health and Proficient Auto
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cardinal and Proficient is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Cardinal Health i.e., Cardinal Health and Proficient Auto go up and down completely randomly.
Pair Corralation between Cardinal Health and Proficient Auto
Considering the 90-day investment horizon Cardinal Health is expected to generate 0.31 times more return on investment than Proficient Auto. However, Cardinal Health is 3.23 times less risky than Proficient Auto. It trades about 0.08 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about -0.1 per unit of risk. If you would invest 11,335 in Cardinal Health on October 10, 2024 and sell it today you would earn a total of 805.00 from holding Cardinal Health or generate 7.1% 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. Proficient Auto Logistics,
Performance |
Timeline |
Cardinal Health |
Proficient Auto Logi |
Cardinal Health and Proficient Auto Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cardinal Health and Proficient Auto
The main advantage of trading using opposite Cardinal Health and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Health position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto's long position.Cardinal Health vs. Henry Schein | Cardinal Health vs. Owens Minor | Cardinal Health vs. Patterson Companies | Cardinal Health vs. McKesson |
Proficient Auto vs. Origin Materials | Proficient Auto vs. Codexis | Proficient Auto vs. Luxfer Holdings PLC | Proficient Auto vs. Arq Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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