Correlation Between Henry Schein and China Medicine
Can any of the company-specific risk be diversified away by investing in both Henry Schein and China Medicine 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 China Medicine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henry Schein and China Medicine, you can compare the effects of market volatilities on Henry Schein and China Medicine 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 China Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and China Medicine.
Diversification Opportunities for Henry Schein and China Medicine
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Henry and China is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and China Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Medicine 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 China Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Medicine has no effect on the direction of Henry Schein i.e., Henry Schein and China Medicine go up and down completely randomly.
Pair Corralation between Henry Schein and China Medicine
If you would invest 7,233 in Henry Schein on September 3, 2024 and sell it today you would earn a total of 472.00 from holding Henry Schein or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Henry Schein vs. China Medicine
Performance |
| Timeline |
| Henry Schein |
| China Medicine |
Henry Schein and China Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henry Schein and China Medicine
The main advantage of trading using opposite Henry Schein and China Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein position performs unexpectedly, China Medicine 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 China Medicine will offset losses from the drop in China Medicine's long position.| Henry Schein vs. Owens Minor | Henry Schein vs. Cardinal Health | Henry Schein vs. Zynex Inc | Henry Schein vs. Patterson Companies |
| China Medicine vs. Cardinal Health | China Medicine vs. Henry Schein | China Medicine vs. Owens Minor | China Medicine 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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