Correlation Between EDAP TMS and Henry Schein
Can any of the company-specific risk be diversified away by investing in both EDAP TMS 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 EDAP TMS and Henry Schein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDAP TMS SA and Henry Schein, you can compare the effects of market volatilities on EDAP TMS 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 EDAP TMS with a short position of Henry Schein. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and Henry Schein.
Diversification Opportunities for EDAP TMS and Henry Schein
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EDAP and Henry is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and EDAP TMS 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 EDAP TMS SA 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 EDAP TMS i.e., EDAP TMS and Henry Schein go up and down completely randomly.
Pair Corralation between EDAP TMS and Henry Schein
Given the investment horizon of 90 days EDAP TMS is expected to generate 2.41 times less return on investment than Henry Schein. In addition to that, EDAP TMS is 2.88 times more volatile than Henry Schein. It trades about 0.07 of its total potential returns per unit of risk. Henry Schein is currently generating about 0.45 per unit of volatility. If you would invest 6,920 in Henry Schein on November 1, 2024 and sell it today you would earn a total of 1,083 from holding Henry Schein or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDAP TMS SA vs. Henry Schein
Performance |
| Timeline |
| EDAP TMS SA |
| Henry Schein |
EDAP TMS and Henry Schein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDAP TMS and Henry Schein
The main advantage of trading using opposite EDAP TMS and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS 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.| EDAP TMS vs. Patterson Companies | EDAP TMS vs. Henry Schein | EDAP TMS vs. McKesson | EDAP TMS vs. Cardinal Health |
| Henry Schein vs. Owens Minor | Henry Schein vs. Cardinal Health | Henry Schein vs. Zynex Inc | Henry Schein vs. Patterson Companies |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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