Correlation Between Park Hotels and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Park Hotels 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 Park Hotels and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Hotels Resorts and Cardinal Health, you can compare the effects of market volatilities on Park Hotels 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 Park Hotels with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Cardinal Health.
Diversification Opportunities for Park Hotels and Cardinal Health
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Park and Cardinal is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Park Hotels 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 Park Hotels Resorts 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 Park Hotels i.e., Park Hotels and Cardinal Health go up and down completely randomly.
Pair Corralation between Park Hotels and Cardinal Health
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to under-perform the Cardinal Health. In addition to that, Park Hotels is 1.44 times more volatile than Cardinal Health. It trades about -0.18 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.1 per unit of volatility. If you would invest 12,195 in Cardinal Health on December 2, 2024 and sell it today you would earn a total of 753.00 from holding Cardinal Health or generate 6.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Park Hotels Resorts vs. Cardinal Health
Performance |
Timeline |
Park Hotels Resorts |
Cardinal Health |
Park Hotels and Cardinal Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Park Hotels and Cardinal Health
The main advantage of trading using opposite Park Hotels and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels 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.Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |