Correlation Between NYSE Composite and Henry Schein
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Henry Schein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Henry Schein, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Henry Schein. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Henry Schein.
Diversification Opportunities for NYSE Composite and Henry Schein
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Henry is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Henry Schein go up and down completely randomly.
Pair Corralation between NYSE Composite and Henry Schein
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.44 times less return on investment than Henry Schein. But when comparing it to its historical volatility, NYSE Composite is 3.62 times less risky than Henry Schein. It trades about 0.24 of its potential returns per unit of risk. Henry Schein is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,111 in Henry Schein on August 27, 2024 and sell it today you would earn a total of 573.00 from holding Henry Schein or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Henry Schein
Performance |
| Timeline |
NYSE Composite and Henry Schein Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Henry Schein
Pair trading matchups for Henry Schein
Pair Trading with NYSE Composite and Henry Schein
The main advantage of trading using opposite NYSE Composite and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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