Correlation Between Cardinal Health and Stag Industrial

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

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

Diversification Opportunities for Cardinal Health and Stag Industrial

0.85

Correlation Coefficient

Cardinal Health  Stag Industrial

Very poor diversification

The 3 months correlation between Cardinal and Stag is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial 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 Stag Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stag Industrial has no effect on the direction of Cardinal Health i.e., Cardinal Health and Stag Industrial go up and down completely randomly.

Pair Corralation between Cardinal Health and Stag Industrial

Assuming the 90 days horizon Cardinal Health is expected to generate 1.07 times more return on investment than Stag Industrial. However, Cardinal Health is 1.07 times more volatile than Stag Industrial. It trades about 0.08 of its potential returns per unit of risk. Stag Industrial is currently generating about 0.0 per unit of risk. If you would invest  8,090  in Cardinal Health on April 15, 2025 and sell it today you would earn a total of  5,740  from holding Cardinal Health or generate 70.95% return on investment over 90 days.

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

Cardinal Health  vs.  Stag Industrial

Cardinal Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Cardinal Health reported solid returns over the last few months and may actually be approaching a breakup point.

Stag Industrial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stag Industrial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Stag Industrial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Cardinal Health and Stag Industrial

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

The idea behind Cardinal Health and Stag Industrial 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.