Correlation Between Mckesson Corp and Visa

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

Diversification Opportunities for Mckesson Corp and Visa

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Mckesson and Visa is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mckesson Corp and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc has no effect on the direction of Mckesson Corp i.e., Mckesson Corp and Visa go up and down completely randomly.

Pair Corralation between Mckesson Corp and Visa

Considering the 90-day investment horizon Mckesson Corp is expected to generate 0.87 times more return on investment than Visa. However, Mckesson Corp is 1.15 times less risky than Visa. It trades about 0.12 of its potential returns per unit of risk. Visa Inc is currently generating about 0.0 per unit of risk. If you would invest  14,723  in Mckesson Corp on June 27, 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 Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mckesson Corp  vs.  Visa 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

Visa Inc 
Visa Performance
0 of 100
Over the last 90 days Visa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Visa Price Channel

Mckesson Corp and Visa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mckesson Corp and Visa

The main advantage of trading using opposite Mckesson Corp and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mckesson Corp position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.
Mckesson Corp vs. BUSHVELD MINERALS LTD
The idea behind Mckesson Corp and Visa 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.
Visa vs. Sigma Lithium Corp
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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