Correlation Between EDAP TMS and McKesson
Can any of the company-specific risk be diversified away by investing in both EDAP TMS 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 EDAP TMS and McKesson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDAP TMS SA and McKesson, you can compare the effects of market volatilities on EDAP TMS 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 EDAP TMS with a short position of McKesson. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and McKesson.
Diversification Opportunities for EDAP TMS and McKesson
Very good diversification
The 3 months correlation between EDAP and McKesson is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and McKesson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McKesson and EDAP TMS 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 EDAP TMS SA 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 EDAP TMS i.e., EDAP TMS and McKesson go up and down completely randomly.
Pair Corralation between EDAP TMS and McKesson
Given the investment horizon of 90 days EDAP TMS SA is expected to under-perform the McKesson. In addition to that, EDAP TMS is 4.2 times more volatile than McKesson. It trades about -0.19 of its total potential returns per unit of risk. McKesson is currently generating about 0.12 per unit of volatility. If you would invest 69,278 in McKesson on March 10, 2025 and sell it today you would earn a total of 2,011 from holding McKesson or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDAP TMS SA vs. McKesson
Performance |
| Timeline |
| EDAP TMS SA |
| McKesson |
EDAP TMS and McKesson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDAP TMS and McKesson
The main advantage of trading using opposite EDAP TMS and McKesson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS 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 EDAP TMS SA 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.| McKesson vs. Cardinal Health | McKesson vs. Henry Schein | McKesson vs. Owens Minor | McKesson vs. EDAP TMS SA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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