Correlation Between Amazon and Henry Schein
Can any of the company-specific risk be diversified away by investing in both Amazon and Henry Schein 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 Amazon and Henry Schein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Henry Schein, you can compare the effects of market volatilities on Amazon and Henry Schein 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 Amazon with a short position of Henry Schein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Henry Schein.
Diversification Opportunities for Amazon and Henry Schein
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amazon and Henry is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and Amazon 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 Amazon Inc are associated (or correlated) with Henry Schein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henry Schein has no effect on the direction of Amazon i.e., Amazon and Henry Schein go up and down completely randomly.
Pair Corralation between Amazon and Henry Schein
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.02 times more return on investment than Henry Schein. However, Amazon is 1.02 times more volatile than Henry Schein. It trades about 0.15 of its potential returns per unit of risk. Henry Schein is currently generating about 0.13 per unit of risk. If you would invest 17,625 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 3,164 from holding Amazon Inc or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Amazon Inc vs. Henry Schein
Performance |
| Timeline |
| Amazon Inc |
| Henry Schein |
Amazon and Henry Schein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Henry Schein
The main advantage of trading using opposite Amazon and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Henry Schein 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 Henry Schein will offset losses from the drop in Henry Schein's long position.The idea behind Amazon Inc and Henry Schein 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.| Henry Schein vs. MCEWEN MINING INC | Henry Schein vs. Zijin Mining Group | Henry Schein vs. LION ONE METALS | Henry Schein vs. Motorcar Parts of |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |