Correlation Between Cogeco Communications and McDonalds Corp
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and McDonalds Corp 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 Cogeco Communications and McDonalds Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and McDonalds Corp CDR, you can compare the effects of market volatilities on Cogeco Communications and McDonalds Corp 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 Cogeco Communications with a short position of McDonalds Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and McDonalds Corp.
Diversification Opportunities for Cogeco Communications and McDonalds Corp
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cogeco and McDonalds is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and McDonalds Corp CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds Corp CDR and Cogeco Communications 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 Cogeco Communications are associated (or correlated) with McDonalds Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds Corp CDR has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and McDonalds Corp go up and down completely randomly.
Pair Corralation between Cogeco Communications and McDonalds Corp
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 1.24 times less return on investment than McDonalds Corp. In addition to that, Cogeco Communications is 1.55 times more volatile than McDonalds Corp CDR. It trades about 0.02 of its total potential returns per unit of risk. McDonalds Corp CDR is currently generating about 0.03 per unit of volatility. If you would invest 2,280 in McDonalds Corp CDR on September 15, 2024 and sell it today you would earn a total of 318.00 from holding McDonalds Corp CDR or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. McDonalds Corp CDR
Performance |
| Timeline |
| Cogeco Communications |
| McDonalds Corp CDR |
Cogeco Communications and McDonalds Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and McDonalds Corp
The main advantage of trading using opposite Cogeco Communications and McDonalds Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, McDonalds Corp 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 McDonalds Corp will offset losses from the drop in McDonalds Corp's long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
| McDonalds Corp vs. Berkshire Hathaway CDR | McDonalds Corp vs. Microsoft Corp CDR | McDonalds Corp vs. Apple Inc CDR | McDonalds Corp vs. Alphabet Inc CDR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |