Correlation Between Apple and CARDINAL HEALTH

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

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

Diversification Opportunities for Apple and CARDINAL HEALTH

-0.31

Correlation Coefficient

Apple  CARDINAL HEALTH

Very good diversification

The 3 months correlation between Apple and CARDINAL is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and CARDINAL HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH and Apple 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 Apple Inc 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 Apple i.e., Apple and CARDINAL HEALTH go up and down completely randomly.

Pair Corralation between Apple and CARDINAL HEALTH

Assuming the 90 days trading horizon Apple is expected to generate 12.45 times less return on investment than CARDINAL HEALTH. In addition to that, Apple is 1.43 times more volatile than CARDINAL HEALTH. It trades about 0.01 of its total potential returns per unit of risk. CARDINAL HEALTH is currently generating about 0.18 per unit of volatility. If you would invest  11,819  in CARDINAL HEALTH on April 24, 2025 and sell it today you would earn a total of  1,621  from holding CARDINAL HEALTH or generate 13.72% return on investment over 90 days.

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

Apple Inc  vs.  CARDINAL HEALTH

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CARDINAL HEALTH

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CARDINAL HEALTH are ranked lower than 13 (%) 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 Apple and CARDINAL HEALTH

The main advantage of trading using opposite Apple and CARDINAL HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.