Correlation Between McKesson and Supreme Cannabis
Can any of the company-specific risk be diversified away by investing in both McKesson and Supreme Cannabis 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 McKesson and Supreme Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McKesson and The Supreme Cannabis, you can compare the effects of market volatilities on McKesson and Supreme Cannabis 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 McKesson with a short position of Supreme Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of McKesson and Supreme Cannabis.
Diversification Opportunities for McKesson and Supreme Cannabis
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McKesson and Supreme is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McKesson and The Supreme Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supreme Cannabis and McKesson 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 McKesson are associated (or correlated) with Supreme Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supreme Cannabis has no effect on the direction of McKesson i.e., McKesson and Supreme Cannabis go up and down completely randomly.
Pair Corralation between McKesson and Supreme Cannabis
If you would invest 31,618 in McKesson on January 24, 2024 and sell it today you would earn a total of 21,114 from holding McKesson or generate 66.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
McKesson vs. The Supreme Cannabis
Performance |
| Timeline |
| McKesson |
| Supreme Cannabis |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McKesson and Supreme Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McKesson and Supreme Cannabis
The main advantage of trading using opposite McKesson and Supreme Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McKesson position performs unexpectedly, Supreme Cannabis 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 Supreme Cannabis will offset losses from the drop in Supreme Cannabis' long position.| McKesson vs. Cardinal Health | McKesson vs. Henry Schein | McKesson vs. Patterson Companies | McKesson vs. Owens Minor |
| Supreme Cannabis vs. VirnetX Holding Corp | Supreme Cannabis vs. Sapiens International | Supreme Cannabis vs. Park City Group | Supreme Cannabis vs. NETGEAR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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