Correlation Between BROADSTNET LEADL and CARDINAL HEALTH

Can any of the company-specific risk be diversified away by investing in both BROADSTNET LEADL 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 BROADSTNET LEADL and CARDINAL HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BROADSTNET LEADL 00025 and CARDINAL HEALTH, you can compare the effects of market volatilities on BROADSTNET LEADL 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 BROADSTNET LEADL with a short position of CARDINAL HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADSTNET LEADL and CARDINAL HEALTH.

Diversification Opportunities for BROADSTNET LEADL and CARDINAL HEALTH

-0.01

Correlation Coefficient

BROADSTNET LEADL  CARDINAL HEALTH

Good diversification

The 3 months correlation between BROADSTNET and CARDINAL is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BROADSTNET LEADL 00025 and CARDINAL HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH and BROADSTNET LEADL 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 BROADSTNET LEADL 00025 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 BROADSTNET LEADL i.e., BROADSTNET LEADL and CARDINAL HEALTH go up and down completely randomly.

Pair Corralation between BROADSTNET LEADL and CARDINAL HEALTH

Assuming the 90 days trading horizon BROADSTNET LEADL 00025 is expected to under-perform the CARDINAL HEALTH. In addition to that, BROADSTNET LEADL is 1.56 times more volatile than CARDINAL HEALTH. It trades about -0.03 of its total potential returns per unit of risk. CARDINAL HEALTH is currently generating about 0.21 per unit of volatility. If you would invest  11,819  in CARDINAL HEALTH on April 23, 2025 and sell it today you would earn a total of  1,951  from holding CARDINAL HEALTH or generate 16.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BROADSTNET LEADL 00025  vs.  CARDINAL HEALTH

BROADSTNET LEADL 00025

Risk-Adjusted Performance

Very Weak

Over the last 90 days BROADSTNET LEADL 00025 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BROADSTNET LEADL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CARDINAL HEALTH

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CARDINAL HEALTH are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, CARDINAL HEALTH unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BROADSTNET LEADL and CARDINAL HEALTH

The main advantage of trading using opposite BROADSTNET LEADL and CARDINAL HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADSTNET LEADL 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.

The idea behind BROADSTNET LEADL 00025 and CARDINAL HEALTH 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.