Correlation Between Henry Schein and SINOPHARM GROUP

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

By analyzing existing cross correlation between Henry Schein and SINOPHARM GROUP 15ON, you can compare the effects of market volatilities on Henry Schein and SINOPHARM GROUP 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 SINOPHARM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and SINOPHARM GROUP.

Diversification Opportunities for Henry Schein and SINOPHARM GROUP

0.27

Correlation Coefficient

Henry Schein  SINOPHARM GROUP

Modest diversification

The 3 months correlation between Henry and SINOPHARM is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and SINOPHARM GROUP 15ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINOPHARM GROUP 15ON 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 SINOPHARM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINOPHARM GROUP 15ON has no effect on the direction of Henry Schein i.e., Henry Schein and SINOPHARM GROUP go up and down completely randomly.

Pair Corralation between Henry Schein and SINOPHARM GROUP

Assuming the 90 days horizon Henry Schein is expected to generate 1.3 times more return on investment than SINOPHARM GROUP. However, Henry Schein is 1.3 times more volatile than SINOPHARM GROUP 15ON. It trades about -0.03 of its potential returns per unit of risk. SINOPHARM GROUP 15ON is currently generating about -0.24 per unit of risk. If you would invest  6,778  in Henry Schein on December 27, 2024 and sell it today you would lose (254.00) from holding Henry Schein or give up 3.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Henry Schein  vs.  SINOPHARM GROUP 15ON

Henry Schein

Risk-Adjusted Performance

Very Weak

Over the last 90 days Henry Schein has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Henry Schein is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SINOPHARM GROUP 15ON

Risk-Adjusted Performance

Very Weak

Over the last 90 days SINOPHARM GROUP 15ON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Henry Schein and SINOPHARM GROUP

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

The idea behind Henry Schein and SINOPHARM GROUP 15ON 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.