Correlation Between Patterson Companies and Henry Schein
Can any of the company-specific risk be diversified away by investing in both Patterson Companies 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 Patterson Companies and Henry Schein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patterson Companies and Henry Schein, you can compare the effects of market volatilities on Patterson Companies 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 Patterson Companies with a short position of Henry Schein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson Companies and Henry Schein.
Diversification Opportunities for Patterson Companies and Henry Schein
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Patterson and Henry is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Patterson Companies and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and Patterson Companies 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 Patterson Companies 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 Patterson Companies i.e., Patterson Companies and Henry Schein go up and down completely randomly.
Pair Corralation between Patterson Companies and Henry Schein
Given the investment horizon of 90 days Patterson Companies is expected to under-perform the Henry Schein. In addition to that, Patterson Companies is 1.35 times more volatile than Henry Schein. It trades about -0.02 of its total potential returns per unit of risk. Henry Schein is currently generating about -0.01 per unit of volatility. If you would invest 8,147 in Henry Schein on August 24, 2024 and sell it today you would lose (770.00) from holding Henry Schein or give up 9.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patterson Companies vs. Henry Schein
Performance |
| Timeline |
| Patterson Companies |
| Henry Schein |
Patterson Companies and Henry Schein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson Companies and Henry Schein
The main advantage of trading using opposite Patterson Companies and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson Companies 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.| Patterson Companies vs. Owens Minor | Patterson Companies vs. Cardinal Health | Patterson Companies vs. McKesson | Patterson Companies vs. Henry Schein |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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