Correlation Between Owens Minor and Henry Schein

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

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

Diversification Opportunities for Owens Minor and Henry Schein

-0.07

Correlation Coefficient

Owens Minor  Henry Schein

Good diversification

The 3 months correlation between Owens and Henry is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Owens Minor and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and Owens Minor 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 Owens Minor 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 Owens Minor i.e., Owens Minor and Henry Schein go up and down completely randomly.

Pair Corralation between Owens Minor and Henry Schein

Considering the 90-day investment horizon Owens Minor is expected to under-perform the Henry Schein. In addition to that, Owens Minor is 2.36 times more volatile than Henry Schein. It trades about -0.03 of its total potential returns per unit of risk. Henry Schein is currently generating about 0.09 per unit of volatility. If you would invest  7,046  in Henry Schein on September 2, 2024 and sell it today you would earn a total of  659.00  from holding Henry Schein or generate 9.35% return on investment over 90 days.

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

Owens Minor  vs.  Henry Schein

Owens Minor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Owens Minor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Henry Schein

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Henry Schein are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward indicators, Henry Schein may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Owens Minor and Henry Schein

The main advantage of trading using opposite Owens Minor and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Owens Minor 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 Owens Minor 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.