Correlation Between G8 EDUCATION and Henry Schein

Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION 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 G8 EDUCATION and Henry Schein into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G8 EDUCATION and Henry Schein, you can compare the effects of market volatilities on G8 EDUCATION 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 G8 EDUCATION with a short position of Henry Schein. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and Henry Schein.

Diversification Opportunities for G8 EDUCATION and Henry Schein

0.21

Correlation Coefficient

G8 EDUCATION  Henry Schein

Modest diversification

The 3 months correlation between 3EAG and Henry is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and G8 EDUCATION 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 G8 EDUCATION 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 G8 EDUCATION i.e., G8 EDUCATION and Henry Schein go up and down completely randomly.

Pair Corralation between G8 EDUCATION and Henry Schein

Assuming the 90 days trading horizon G8 EDUCATION is expected to generate 1.65 times less return on investment than Henry Schein. In addition to that, G8 EDUCATION is 1.77 times more volatile than Henry Schein. It trades about 0.08 of its total potential returns per unit of risk. Henry Schein is currently generating about 0.23 per unit of volatility. If you would invest  6,778  in Henry Schein on October 27, 2024 and sell it today you would earn a total of  338.00  from holding Henry Schein or generate 4.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

G8 EDUCATION  vs.  Henry Schein

G8 EDUCATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G8 EDUCATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, G8 EDUCATION is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Henry Schein

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Henry Schein are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Henry Schein may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with G8 EDUCATION and Henry Schein

The main advantage of trading using opposite G8 EDUCATION and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION 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.

The idea behind G8 EDUCATION and Henry Schein pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.