Correlation Between Henry Schein and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Henry Schein and Cardinal Health 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 Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henry Schein and Cardinal Health, you can compare the effects of market volatilities on Henry Schein and Cardinal Health 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 Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and Cardinal Health.
Diversification Opportunities for Henry Schein and Cardinal Health
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Henry and Cardinal is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health 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 Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Henry Schein i.e., Henry Schein and Cardinal Health go up and down completely randomly.
Pair Corralation between Henry Schein and Cardinal Health
Given the investment horizon of 90 days Henry Schein is expected to under-perform the Cardinal Health. In addition to that, Henry Schein is 1.26 times more volatile than Cardinal Health. It trades about -0.17 of its total potential returns per unit of risk. Cardinal Health is currently generating about -0.17 per unit of volatility. If you would invest 11,203 in Cardinal Health on January 21, 2024 and sell it today you would lose (384.00) from holding Cardinal Health or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henry Schein vs. Cardinal Health
Performance |
| Timeline |
| Henry Schein |
| Cardinal Health |
Henry Schein and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henry Schein and Cardinal Health
The main advantage of trading using opposite Henry Schein and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| Henry Schein vs. Certara | Henry Schein vs. HealthStream | Henry Schein vs. Evolent Health | Henry Schein vs. Streamline Health Solutions |
| Cardinal Health vs. Certara | Cardinal Health vs. HealthStream | Cardinal Health vs. Evolent Health | Cardinal Health vs. Streamline Health Solutions |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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