Correlation Between Henry Schein and Prestige Consumer
Can any of the company-specific risk be diversified away by investing in both Henry Schein and Prestige Consumer 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 Henry Schein and Prestige Consumer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henry Schein and Prestige Consumer Healthcare, you can compare the effects of market volatilities on Henry Schein and Prestige Consumer 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 Henry Schein with a short position of Prestige Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and Prestige Consumer.
Diversification Opportunities for Henry Schein and Prestige Consumer
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Henry and Prestige is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and Prestige Consumer Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Consumer and Henry Schein 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 Henry Schein are associated (or correlated) with Prestige Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Consumer has no effect on the direction of Henry Schein i.e., Henry Schein and Prestige Consumer go up and down completely randomly.
Pair Corralation between Henry Schein and Prestige Consumer
Assuming the 90 days horizon Henry Schein is expected to generate 1.23 times less return on investment than Prestige Consumer. In addition to that, Henry Schein is 1.09 times more volatile than Prestige Consumer Healthcare. It trades about 0.26 of its total potential returns per unit of risk. Prestige Consumer Healthcare is currently generating about 0.35 per unit of volatility. If you would invest 6,700 in Prestige Consumer Healthcare on September 3, 2024 and sell it today you would earn a total of 1,150 from holding Prestige Consumer Healthcare or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henry Schein vs. Prestige Consumer Healthcare
Performance |
| Timeline |
| Henry Schein |
| Prestige Consumer |
Henry Schein and Prestige Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henry Schein and Prestige Consumer
The main advantage of trading using opposite Henry Schein and Prestige Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein position performs unexpectedly, Prestige Consumer 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 Prestige Consumer will offset losses from the drop in Prestige Consumer's long position.| Henry Schein vs. MCEWEN MINING INC | Henry Schein vs. Zijin Mining Group | Henry Schein vs. LION ONE METALS | Henry Schein vs. Motorcar Parts of |
| Prestige Consumer vs. MARKET VECTR RETAIL | Prestige Consumer vs. Virtus Investment Partners | Prestige Consumer vs. Auto Trader Group | Prestige Consumer vs. FLOW TRADERS LTD |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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