Correlation Between Henry Schein and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both Henry Schein and Prestige Brand 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 Prestige Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henry Schein and Prestige Brand Holdings, you can compare the effects of market volatilities on Henry Schein and Prestige Brand 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 Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and Prestige Brand.
Diversification Opportunities for Henry Schein and Prestige Brand
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Henry and Prestige is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings 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 Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of Henry Schein i.e., Henry Schein and Prestige Brand go up and down completely randomly.
Pair Corralation between Henry Schein and Prestige Brand
Given the investment horizon of 90 days Henry Schein is expected to under-perform the Prestige Brand. But the stock apears to be less risky and, when comparing its historical volatility, Henry Schein is 1.0 times less risky than Prestige Brand. The stock trades about -0.02 of its potential returns per unit of risk. The Prestige Brand Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,319 in Prestige Brand Holdings on December 30, 2023 and sell it today you would earn a total of 1,937 from holding Prestige Brand Holdings or generate 36.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Henry Schein vs. Prestige Brand Holdings
Performance |
Timeline |
Henry Schein |
Prestige Brand Holdings |
Henry Schein and Prestige Brand Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Henry Schein and Prestige Brand
The main advantage of trading using opposite Henry Schein and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.Henry Schein vs. EDAP TMS SA | Henry Schein vs. Akso Health Group | Henry Schein vs. Cardinal Health | Henry Schein vs. Zynex Inc |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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