McDonalds Correlations

MCD Stock

USD 290.28 1.81 0.63%

The current 90-days correlation between McDonalds and Starbucks is 0.09 (i.e., Significant diversification). The correlation of McDonalds is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.

McDonalds Correlation With Market

Weak diversification

The correlation between McDonalds and DJI is 0.33 (i.e., Weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and DJI in the same portfolio, assuming nothing else is changed.

Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in McDonalds. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in main economic indicators.

For information on how to trade McDonalds Stock refer to our How to Trade McDonalds Stock guide.

Moving together with McDonalds Stock

0.71

Home Depot

Pair Corr

Moving against McDonalds Stock

0.55	LNW	Light Wonder	Pair Corr
0.32	BH	Biglari Holdings	Pair Corr
0.48	VC	Visteon Corp	Pair Corr
0.44	FL	Foot Locker Earnings Call This Week	Pair Corr
0.43	ALV	Autoliv	Pair Corr

Related Correlations Analysis

	CMG	BROS	DPZ	YUM	SBUX	WING	SHAK	PZZA	DRI	YUMC
CMG		0.56	0.57	0.0	0.66	-0.15	0.52	0.41	0.62	0.63	CMG
BROS	0.56		0.74	0.0	0.68	-0.51	0.68	0.01	0.56	0.46	BROS
DPZ	0.57	0.74		0.31	0.53	-0.39	0.72	0.37	0.62	0.65	DPZ
YUM	0.0	0.0	0.31		0.09	0.17	0.04	0.14	0.06	0.37	YUM
SBUX	0.66	0.68	0.53	0.09		-0.36	0.61	0.24	0.49	0.49	SBUX
WING	-0.15	-0.51	-0.39	0.17	-0.36		-0.72	-0.24	-0.16	-0.4	WING
SHAK	0.52	0.68	0.72	0.04	0.61	-0.72		0.47	0.56	0.69	SHAK
PZZA	0.41	0.01	0.37	0.14	0.24	-0.24	0.47		0.49	0.52	PZZA
DRI	0.62	0.56	0.62	0.06	0.49	-0.16	0.56	0.49		0.47	DRI
YUMC	0.63	0.46	0.65	0.37	0.49	-0.4	0.69	0.52	0.47		YUMC
	CMG	BROS	DPZ	YUM	SBUX	WING	SHAK	PZZA	DRI	YUMC

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

DPZ	+ 0.74	BROS
SHAK	+ 0.72	DPZ
YUMC	+ 0.69	SHAK
SBUX	+ 0.68	BROS
SHAK	+ 0.68	BROS
SBUX	+ 0.66	CMG

High negative correlations

SHAK	- 0.72	WING
WING	- 0.51	BROS
YUMC	- 0.4	WING
WING	- 0.39	DPZ
WING	- 0.36	SBUX
PZZA	- 0.24	WING

Risk-Adjusted Indicators

There is a big difference between McDonalds Stock performing well and McDonalds Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze McDonalds' multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
CMG	1.30	0.11	0.05	0.24	2.06	(1.37)	2.74	(2.68)	10.78
BROS	2.15	0.69	0.35	0.84	1.35	(2.58)	5.38	(2.77)	30.86
DPZ	1.17	0.01	0.01	0.13	1.19	(1.39)	2.92	(2.11)	7.92
YUM	0.77	(0.06)	0.00	(0.03)	0.00	0.00	1.48	(1.64)	6.05
SBUX	1.06	0.11	0.04	0.35	0.96	(1.26)	2.44	(2.04)	7.49
WING	2.05	(0.32)	0.00	(0.09)	0.00	0.00	3.90	(4.14)	26.70
SHAK	1.69	0.09	0.06	0.21	1.55	(2.15)	3.49	(2.89)	11.94
PZZA	2.07	0.07	0.03	0.19	2.39	(2.21)	4.22	(4.50)	10.62
DRI	1.09	(0.01)	0.02	0.11	0.97	(1.35)	1.90	(1.75)	11.46
YUMC	1.88	0.46	0.21	0.78	1.61	(2.29)	7.17	(3.47)	20.82

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