Correlation Between Cardinal Health and Roadside Real

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

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

Diversification Opportunities for Cardinal Health and Roadside Real

0.83

Correlation Coefficient

Cardinal Health  Roadside Real

Very poor diversification

The 3 months correlation between Cardinal and Roadside is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Roadside Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadside Real Estate 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 Roadside Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadside Real Estate has no effect on the direction of Cardinal Health i.e., Cardinal Health and Roadside Real go up and down completely randomly.

Pair Corralation between Cardinal Health and Roadside Real

Assuming the 90 days trading horizon Cardinal Health is expected to generate 2.17 times less return on investment than Roadside Real. But when comparing it to its historical volatility, Cardinal Health is 1.97 times less risky than Roadside Real. It trades about 0.25 of its potential returns per unit of risk. Roadside Real Estate is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  3,250  in Roadside Real Estate on April 23, 2025 and sell it today you would earn a total of  1,450  from holding Roadside Real Estate or generate 44.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Cardinal Health  vs.  Roadside Real Estate

Cardinal Health

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Cardinal Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Roadside Real Estate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Roadside Real Estate are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Roadside Real unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardinal Health and Roadside Real

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

The idea behind Cardinal Health and Roadside Real Estate 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.