Correlation Between McKesson and Henry Schein
Can any of the company-specific risk be diversified away by investing in both McKesson 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 McKesson and Henry Schein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McKesson and Henry Schein, you can compare the effects of market volatilities on McKesson 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 McKesson with a short position of Henry Schein. Check out your portfolio center. Please also check ongoing floating volatility patterns of McKesson and Henry Schein.
Diversification Opportunities for McKesson and Henry Schein
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McKesson and Henry is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McKesson and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and McKesson 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 McKesson 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 McKesson i.e., McKesson and Henry Schein go up and down completely randomly.
Pair Corralation between McKesson and Henry Schein
Considering the 90-day investment horizon McKesson is expected to generate 0.96 times more return on investment than Henry Schein. However, McKesson is 1.04 times less risky than Henry Schein. It trades about 0.08 of its potential returns per unit of risk. Henry Schein is currently generating about 0.0 per unit of risk. If you would invest 37,454 in McKesson on August 27, 2024 and sell it today you would earn a total of 24,865 from holding McKesson or generate 66.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McKesson vs. Henry Schein
Performance |
| Timeline |
| McKesson |
| Henry Schein |
McKesson and Henry Schein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McKesson and Henry Schein
The main advantage of trading using opposite McKesson and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McKesson 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.| McKesson vs. Cardinal Health | McKesson vs. Henry Schein | McKesson vs. Patterson Companies | McKesson vs. Owens Minor |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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