Correlation Between Zynex and Cardinal Health

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

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

Diversification Opportunities for Zynex and Cardinal Health

0.64

Correlation Coefficient

Zynex  Cardinal Health

Poor diversification

The 3 months correlation between Zynex and Cardinal is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Zynex Inc and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Zynex 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 Zynex 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 Zynex i.e., Zynex and Cardinal Health go up and down completely randomly.

Pair Corralation between Zynex and Cardinal Health

Given the investment horizon of 90 days Zynex Inc is expected to under-perform the Cardinal Health. In addition to that, Zynex is 1.49 times more volatile than Cardinal Health. It trades about -0.29 of its total potential returns per unit of risk. Cardinal Health is currently generating about -0.28 per unit of volatility. If you would invest  11,206  in Cardinal Health on February 1, 2024 and sell it today you would lose (902.00) from holding Cardinal Health or give up 8.05% of portfolio value over 90 days.

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

Zynex Inc  vs.  Cardinal Health

Zynex Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cardinal Health

Risk-Adjusted Performance

0 of 100

Very Weak

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.

Pair Trading with Zynex and Cardinal Health

The main advantage of trading using opposite Zynex and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zynex 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 Zynex 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.