Correlation Between CARDINAL HEALTH and Apple

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

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

Diversification Opportunities for CARDINAL HEALTH and Apple

-0.25

Correlation Coefficient

CARDINAL HEALTH  Apple

Very good diversification

The 3 months correlation between CARDINAL and Apple is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CARDINAL HEALTH and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of CARDINAL HEALTH i.e., CARDINAL HEALTH and Apple go up and down completely randomly.

Pair Corralation between CARDINAL HEALTH and Apple

Assuming the 90 days trading horizon CARDINAL HEALTH is expected to generate 0.73 times more return on investment than Apple. However, CARDINAL HEALTH is 1.37 times less risky than Apple. It trades about 0.25 of its potential returns per unit of risk. Apple Inc is currently generating about 0.04 per unit of risk. If you would invest  11,385  in CARDINAL HEALTH on April 20, 2025 and sell it today you would earn a total of  2,405  from holding CARDINAL HEALTH or generate 21.12% return on investment over 90 days.

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

CARDINAL HEALTH  vs.  Apple Inc

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 uncertain technical indicators, CARDINAL HEALTH unveiled solid returns over the last few months and may actually be approaching a breakup point.

Apple Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with CARDINAL HEALTH and Apple

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

The idea behind CARDINAL HEALTH and Apple Inc 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.