Correlation Between CDW and Henry Schein

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

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

Diversification Opportunities for CDW and Henry Schein

0.81

Correlation Coefficient

CDW  Henry Schein

Very poor diversification

The 3 months correlation between CDW and Henry is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp. and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein and CDW 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 CDW Corporation 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 CDW i.e., CDW and Henry Schein go up and down completely randomly.

Pair Corralation between CDW and Henry Schein

Assuming the 90 days horizon CDW Corporation is expected to generate 1.35 times more return on investment than Henry Schein. However, CDW is 1.35 times more volatile than Henry Schein. It trades about 0.08 of its potential returns per unit of risk. Henry Schein is currently generating about 0.03 per unit of risk. If you would invest  13,869  in CDW Corporation on April 24, 2025 and sell it today you would earn a total of  1,216  from holding CDW Corporation or generate 8.77% return on investment over 90 days.

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

CDW Corp.  vs.  Henry Schein

CDW Corporation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CDW may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Henry Schein

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Henry Schein are ranked lower than 2 (%) 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.

Pair Trading with CDW and Henry Schein

The main advantage of trading using opposite CDW and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW 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 CDW Corporation 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.