Correlation Between Concord Medical and McKesson
Can any of the company-specific risk be diversified away by investing in both Concord Medical 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 Concord Medical and McKesson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concord Medical Services and McKesson, you can compare the effects of market volatilities on Concord Medical 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 Concord Medical with a short position of McKesson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and McKesson.
Diversification Opportunities for Concord Medical and McKesson
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Concord and McKesson is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and McKesson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McKesson and Concord Medical 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 Concord Medical Services 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 Concord Medical i.e., Concord Medical and McKesson go up and down completely randomly.
Pair Corralation between Concord Medical and McKesson
Considering the 90-day investment horizon Concord Medical is expected to generate 4.5 times less return on investment than McKesson. In addition to that, Concord Medical is 3.37 times more volatile than McKesson. It trades about 0.01 of its total potential returns per unit of risk. McKesson is currently generating about 0.1 per unit of volatility. If you would invest 71,037 in McKesson on July 20, 2025 and sell it today you would earn a total of 7,563 from holding McKesson or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. McKesson
Performance |
| Timeline |
| Concord Medical Services |
| McKesson |
Concord Medical and McKesson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and McKesson
The main advantage of trading using opposite Concord Medical and McKesson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical 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.| Concord Medical vs. Syra Health Corp | Concord Medical vs. Longevity Health Holdings, | Concord Medical vs. INVO Fertility, | Concord Medical vs. Shineco |
| McKesson vs. CVS Health Corp | McKesson vs. Cencora | McKesson vs. HCA Holdings | McKesson vs. Vertex Pharmaceuticals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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