Correlation Between Mckesson Corp and Bar Harbor

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

Diversification Opportunities for Mckesson Corp and Bar Harbor

0.13
  Correlation Coefficient

Average diversification

The 1 month correlation between Mckesson and Bar Harbor is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mckesson Corp and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares 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 Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Mckesson Corp i.e., Mckesson Corp and Bar Harbor go up and down completely randomly.

Pair Corralation between Mckesson Corp and Bar Harbor

Considering the 90-day investment horizon Mckesson Corp is expected to under-perform the Bar Harbor. But the stock apears to be less risky and, when comparing its historical volatility, Mckesson Corp is 1.58 times less risky than Bar Harbor. The stock trades about -0.21 of its potential returns per unit of risk. The Bar Harbor Bankshares is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,766  in Bar Harbor Bankshares on July 3, 2022 and sell it today you would lose (114.00)  from holding Bar Harbor Bankshares or give up 4.12% of portfolio value over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mckesson Corp  vs.  Bar Harbor Bankshares

 Performance (%) 
       Timeline  
Mckesson Corp 
Mckesson Performance
0 of 100
Over the last 90 days Mckesson Corp 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 fundamental indicators remain fairly strong which may send shares a bit higher in November 2022. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Mckesson Price Channel

Bar Harbor Bankshares 
Bar Harbor Performance
0 of 100
Over the last 90 days Bar Harbor Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Bar Harbor Price Channel

Mckesson Corp and Bar Harbor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mckesson Corp and Bar Harbor

The main advantage of trading using opposite Mckesson Corp and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mckesson Corp position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.
Mckesson Corp vs. Amazon Inc
The idea behind Mckesson Corp and Bar Harbor Bankshares 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.
Bar Harbor 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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