Correlation Between Cardinal Health and Predictive Oncology

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

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

Diversification Opportunities for Cardinal Health and Predictive Oncology

-0.31

Correlation Coefficient

Cardinal Health  Predictive Oncology

Very good diversification

The 3 months correlation between Cardinal and Predictive is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Health and Predictive Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predictive Oncology 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 Predictive Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predictive Oncology has no effect on the direction of Cardinal Health i.e., Cardinal Health and Predictive Oncology go up and down completely randomly.

Pair Corralation between Cardinal Health and Predictive Oncology

Considering the 90-day investment horizon Cardinal Health is expected to generate 0.38 times more return on investment than Predictive Oncology. However, Cardinal Health is 2.6 times less risky than Predictive Oncology. It trades about -0.02 of its potential returns per unit of risk. Predictive Oncology is currently generating about -0.02 per unit of risk. If you would invest  15,203  in Cardinal Health on May 22, 2025 and sell it today you would lose (301.00) from holding Cardinal Health or give up 1.98% of portfolio value over 90 days.

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

Cardinal Health  vs.  Predictive Oncology

Cardinal Health

Risk-Adjusted Performance

Weakest

Over the last 90 days Cardinal Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cardinal Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Predictive Oncology

Risk-Adjusted Performance

Weakest

Over the last 90 days Predictive Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Predictive Oncology is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cardinal Health and Predictive Oncology

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

The idea behind Cardinal Health and Predictive Oncology 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.