Correlation Between Mckesson Corp and AKA Brands

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

Diversification Opportunities for Mckesson Corp and AKA Brands

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Mckesson and AKA Brands is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mckesson Corp and AKA Brands Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKA Brands Holding and Mckesson Corp 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 Corp are associated (or correlated) with AKA Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKA Brands Holding has no effect on the direction of Mckesson Corp i.e., Mckesson Corp and AKA Brands go up and down completely randomly.

Pair Corralation between Mckesson Corp and AKA Brands

Considering the 90-day investment horizon Mckesson Corp is expected to generate 0.18 times more return on investment than AKA Brands. However, Mckesson Corp is 5.7 times less risky than AKA Brands. It trades about -0.2 of its potential returns per unit of risk. AKA Brands Holding is currently generating about -0.25 per unit of risk. If you would invest  36,080  in Mckesson Corp on July 5, 2022 and sell it today you would lose (2,093)  from holding Mckesson Corp or give up 5.8% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mckesson Corp  vs.  AKA Brands Holding

 Performance (%) 
       Timeline  
Mckesson Corp 
Mckesson Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Mckesson Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Mckesson Corp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Mckesson Price Channel

AKA Brands Holding 
AKA Brands Performance
0 of 100
Over the last 90 days AKA Brands Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

AKA Brands Price Channel

Mckesson Corp and AKA Brands Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mckesson Corp and AKA Brands

The main advantage of trading using opposite Mckesson Corp and AKA Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mckesson Corp position performs unexpectedly, AKA Brands 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 AKA Brands will offset losses from the drop in AKA Brands' long position.
Mckesson Corp vs. Amazon Inc
The idea behind Mckesson Corp and AKA Brands Holding 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.
AKA Brands vs. Amazon Inc
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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