Correlation Between Henry Schein and KFT

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Can any of the company-specific risk be diversified away by investing in both Henry Schein and KFT 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 KFT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henry Schein and KFT, you can compare the effects of market volatilities on Henry Schein and KFT 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 KFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and KFT.

Diversification Opportunities for Henry Schein and KFT

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Henry and KFT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and KFT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KFT 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 KFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KFT has no effect on the direction of Henry Schein i.e., Henry Schein and KFT go up and down completely randomly.

Pair Corralation between Henry Schein and KFT

If you would invest (100.00) in KFT on December 30, 2023 and sell it today you would earn a total of  100.00  from holding KFT or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Henry Schein  vs.  KFT

 Performance 
       Timeline  
Henry Schein 

Risk-Adjusted Performance

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

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days KFT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, KFT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Henry Schein and KFT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Henry Schein and KFT

The main advantage of trading using opposite Henry Schein and KFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein position performs unexpectedly, KFT 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 KFT will offset losses from the drop in KFT's long position.
The idea behind Henry Schein and KFT 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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