Correlation Between Intel and Henry Schein

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

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

Diversification Opportunities for Intel and Henry Schein

0.06

Correlation Coefficient

Intel  Henry Schein

Significant diversification

The 3 months correlation between Intel and Henry is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and Intel 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 Intel 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 Intel i.e., Intel and Henry Schein go up and down completely randomly.

Pair Corralation between Intel and Henry Schein

Assuming the 90 days trading horizon Intel is expected to generate 1.94 times more return on investment than Henry Schein. However, Intel is 1.94 times more volatile than Henry Schein. It trades about 0.0 of its potential returns per unit of risk. Henry Schein is currently generating about 0.0 per unit of risk. If you would invest  2,365  in Intel on September 14, 2024 and sell it today you would lose (370.00) from holding Intel or give up 15.64% of portfolio value over 90 days.

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

Intel  vs.  Henry Schein

Intel

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Intel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Henry Schein

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Henry Schein are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Henry Schein reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Henry Schein

The main advantage of trading using opposite Intel and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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 Intel 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.