Correlation Between InfuSystems Holdings and McKesson

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

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

Diversification Opportunities for InfuSystems Holdings and McKesson

-0.93

Correlation Coefficient

InfuSystems Holdings  McKesson

Pay attention - limited upside

The 3 months correlation between InfuSystems and McKesson is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and McKesson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McKesson and InfuSystems Holdings 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 InfuSystems Holdings 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 InfuSystems Holdings i.e., InfuSystems Holdings and McKesson go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and McKesson

Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the McKesson. In addition to that, InfuSystems Holdings is 2.35 times more volatile than McKesson. It trades about -0.22 of its total potential returns per unit of risk. McKesson is currently generating about 0.16 per unit of volatility. If you would invest  60,376  in McKesson on January 25, 2025 and sell it today you would earn a total of  9,124  from holding McKesson or generate 15.11% return on investment over 90 days.

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

InfuSystems Holdings  vs.  McKesson

InfuSystems Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days InfuSystems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

McKesson

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in McKesson are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, McKesson disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InfuSystems Holdings and McKesson

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

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.