Correlation Between Mckesson Corp and ATT

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

Diversification Opportunities for Mckesson Corp and ATT

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Mckesson and ATT is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mckesson Corp and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Mckesson Corp i.e., Mckesson Corp and ATT go up and down completely randomly.

Pair Corralation between Mckesson Corp and ATT

Considering the 90-day investment horizon Mckesson Corp is expected to generate 1.03 times more return on investment than ATT. However, Mckesson Corp is 1.03 times more volatile than ATT Inc. It trades about 0.12 of its potential returns per unit of risk. ATT Inc is currently generating about -0.01 per unit of risk. If you would invest  14,723  in Mckesson Corp on June 26, 2022 and sell it today you would earn a total of  19,604  from holding Mckesson Corp or generate 133.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Mckesson Corp  vs.  ATT Inc

 Performance (%) 
       Timeline  
Mckesson Corp 
Mckesson Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Mckesson Corp are ranked lower than 4 (%) 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

ATT Inc 
ATT Performance
0 of 100
Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ATT Price Channel

Mckesson Corp and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mckesson Corp and ATT

The main advantage of trading using opposite Mckesson Corp and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mckesson Corp position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.
Mckesson Corp vs. BUSHVELD MINERALS LTD
The idea behind Mckesson Corp and ATT Inc 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.
ATT vs. BUSHVELD MINERALS LTD
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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