Correlation Between Henry Schein and Patterson Companies
Can any of the company-specific risk be diversified away by investing in both Henry Schein and Patterson Companies 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 Patterson Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henry Schein and Patterson Companies, you can compare the effects of market volatilities on Henry Schein and Patterson Companies 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 Patterson Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and Patterson Companies.
Diversification Opportunities for Henry Schein and Patterson Companies
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Henry and Patterson is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and Patterson Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson Companies 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 Patterson Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson Companies has no effect on the direction of Henry Schein i.e., Henry Schein and Patterson Companies go up and down completely randomly.
Pair Corralation between Henry Schein and Patterson Companies
Given the investment horizon of 90 days Henry Schein is expected to generate 5.04 times less return on investment than Patterson Companies. But when comparing it to its historical volatility, Henry Schein is 1.82 times less risky than Patterson Companies. It trades about 0.01 of its potential returns per unit of risk. Patterson Companies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,887 in Patterson Companies on October 20, 2024 and sell it today you would earn a total of 203.00 from holding Patterson Companies or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henry Schein vs. Patterson Companies
Performance |
| Timeline |
| Henry Schein |
| Patterson Companies |
Henry Schein and Patterson Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henry Schein and Patterson Companies
The main advantage of trading using opposite Henry Schein and Patterson Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein position performs unexpectedly, Patterson Companies 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 Patterson Companies will offset losses from the drop in Patterson Companies' long position.| Henry Schein vs. Owens Minor | Henry Schein vs. Cardinal Health | Henry Schein vs. Zynex Inc | Henry Schein vs. Patterson Companies |
| Patterson Companies vs. Owens Minor | Patterson Companies vs. Cardinal Health | Patterson Companies vs. McKesson | Patterson Companies vs. Henry Schein |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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