Correlation Between Genworth Financial and McDonalds
Can any of the company-specific risk be diversified away by investing in both Genworth Financial and McDonalds 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 Genworth Financial and McDonalds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genworth Financial and McDonalds, you can compare the effects of market volatilities on Genworth Financial and McDonalds 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 Genworth Financial with a short position of McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genworth Financial and McDonalds.
Diversification Opportunities for Genworth Financial and McDonalds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Genworth and McDonalds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds and Genworth Financial 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 Genworth Financial are associated (or correlated) with McDonalds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds has no effect on the direction of Genworth Financial i.e., Genworth Financial and McDonalds go up and down completely randomly.
Pair Corralation between Genworth Financial and McDonalds
If you would invest 483,608 in McDonalds on September 2, 2024 and sell it today you would earn a total of 116,840 from holding McDonalds or generate 24.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Genworth Financial vs. McDonalds
Performance |
| Timeline |
| Genworth Financial |
| McDonalds |
Genworth Financial and McDonalds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genworth Financial and McDonalds
The main advantage of trading using opposite Genworth Financial and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth Financial position performs unexpectedly, McDonalds 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 will offset losses from the drop in McDonalds' long position.| Genworth Financial vs. First Majestic Silver | Genworth Financial vs. Verizon Communications | Genworth Financial vs. Deutsche Bank Aktiengesellschaft | Genworth Financial vs. DXC Technology |
| McDonalds vs. First Republic Bank | McDonalds vs. United States Steel | McDonalds vs. McEwen Mining | McDonalds vs. Genworth Financial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |