Correlation Between Kura Sushi and MCKESSON

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

By analyzing existing cross correlation between Kura Sushi USA and MCKESSON P NEW, you can compare the effects of market volatilities on Kura Sushi and MCKESSON 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 Kura Sushi with a short position of MCKESSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and MCKESSON.

Diversification Opportunities for Kura Sushi and MCKESSON

-0.35

Correlation Coefficient

Kura Sushi  MCKESSON

Very good diversification

The 3 months correlation between Kura and MCKESSON is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and MCKESSON P NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCKESSON P NEW and Kura Sushi 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 Kura Sushi USA are associated (or correlated) with MCKESSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCKESSON P NEW has no effect on the direction of Kura Sushi i.e., Kura Sushi and MCKESSON go up and down completely randomly.

Pair Corralation between Kura Sushi and MCKESSON

Given the investment horizon of 90 days Kura Sushi USA is expected to generate 3.95 times more return on investment than MCKESSON. However, Kura Sushi is 3.95 times more volatile than MCKESSON P NEW. It trades about 0.06 of its potential returns per unit of risk. MCKESSON P NEW is currently generating about -0.15 per unit of risk. If you would invest  8,246  in Kura Sushi USA on September 26, 2024 and sell it today you would earn a total of  818.00  from holding Kura Sushi USA or generate 9.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.37%
Values	Daily Returns

Kura Sushi USA  vs.  MCKESSON P NEW

Kura Sushi USA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kura Sushi USA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kura Sushi unveiled solid returns over the last few months and may actually be approaching a breakup point.

MCKESSON P NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCKESSON P NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MCKESSON P NEW investors.

Pair Trading with Kura Sushi and MCKESSON

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

The idea behind Kura Sushi USA and MCKESSON P NEW 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.