Correlation Between Zynex and McKesson

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

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

Diversification Opportunities for Zynex and McKesson

0.12

Correlation Coefficient

Zynex  McKesson

Average diversification

The 3 months correlation between Zynex and McKesson is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Zynex Inc and McKesson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McKesson and Zynex 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 Zynex Inc 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 has no effect on the direction of Zynex i.e., Zynex and McKesson go up and down completely randomly.

Pair Corralation between Zynex and McKesson

Given the investment horizon of 90 days Zynex is expected to generate 3.1 times less return on investment than McKesson. In addition to that, Zynex is 1.55 times more volatile than McKesson. It trades about 0.02 of its total potential returns per unit of risk. McKesson is currently generating about 0.09 per unit of volatility. If you would invest  50,759  in McKesson on September 19, 2024 and sell it today you would earn a total of  5,519  from holding McKesson or generate 10.87% return on investment over 90 days.

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

Zynex Inc  vs.  McKesson

Zynex Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zynex Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Zynex is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

McKesson

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in McKesson are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental indicators, McKesson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Zynex and McKesson

The main advantage of trading using opposite Zynex and McKesson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zynex 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 Zynex Inc and McKesson 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.

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 the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.