Correlation Between McKesson and Zynex

Can any of the company-specific risk be diversified away by investing in both McKesson and Zynex 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 Zynex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between McKesson and Zynex Inc, you can compare the effects of market volatilities on McKesson and Zynex 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 Zynex. Check out your portfolio center. Please also check ongoing floating volatility patterns of McKesson and Zynex.

Diversification Opportunities for McKesson and Zynex

-0.2

Correlation Coefficient

McKesson  Zynex

Good diversification

The 3 months correlation between McKesson and Zynex is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding McKesson and Zynex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zynex Inc 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 Zynex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zynex Inc has no effect on the direction of McKesson i.e., McKesson and Zynex go up and down completely randomly.

Pair Corralation between McKesson and Zynex

Considering the 90-day investment horizon McKesson is expected to generate 0.57 times more return on investment than Zynex. However, McKesson is 1.77 times less risky than Zynex. It trades about 0.0 of its potential returns per unit of risk. Zynex Inc is currently generating about -0.08 per unit of risk. If you would invest  62,779  in McKesson on November 29, 2024 and sell it today you would lose (417.00) from holding McKesson or give up 0.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

McKesson  vs.  Zynex Inc

McKesson

Risk-Adjusted Performance

Very Weak

Over the last 90 days McKesson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, McKesson is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Zynex Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zynex Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with McKesson and Zynex

The main advantage of trading using opposite McKesson and Zynex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McKesson position performs unexpectedly, Zynex 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 Zynex will offset losses from the drop in Zynex's long position.

The idea behind McKesson and Zynex 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..