Correlation Between Henry Schein and MEDIPAL HOLDINGS

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

By analyzing existing cross correlation between Henry Schein and MEDIPAL HOLDINGS P, you can compare the effects of market volatilities on Henry Schein and MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and MEDIPAL HOLDINGS.

Diversification Opportunities for Henry Schein and MEDIPAL HOLDINGS

-0.22

Correlation Coefficient

Henry Schein  MEDIPAL HOLDINGS

Very good diversification

The 3 months correlation between Henry and MEDIPAL is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and MEDIPAL HOLDINGS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPAL HOLDINGS P 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 MEDIPAL HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPAL HOLDINGS P has no effect on the direction of Henry Schein i.e., Henry Schein and MEDIPAL HOLDINGS go up and down completely randomly.

Pair Corralation between Henry Schein and MEDIPAL HOLDINGS

Assuming the 90 days horizon Henry Schein is expected to under-perform the MEDIPAL HOLDINGS. In addition to that, Henry Schein is 1.53 times more volatile than MEDIPAL HOLDINGS P. It trades about -0.14 of its total potential returns per unit of risk. MEDIPAL HOLDINGS P is currently generating about -0.2 per unit of volatility. If you would invest  1,520  in MEDIPAL HOLDINGS P on September 23, 2024 and sell it today you would lose (80.00) from holding MEDIPAL HOLDINGS P or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Henry Schein  vs.  MEDIPAL HOLDINGS P

Henry Schein

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Henry Schein are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Henry Schein is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MEDIPAL HOLDINGS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIPAL HOLDINGS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Henry Schein and MEDIPAL HOLDINGS

The main advantage of trading using opposite Henry Schein and MEDIPAL HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein position performs unexpectedly, MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS will offset losses from the drop in MEDIPAL HOLDINGS's long position.

The idea behind Henry Schein and MEDIPAL HOLDINGS P 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.