Correlation Between McDonalds and Blue Water
Can any of the company-specific risk be diversified away by investing in both McDonalds and Blue Water 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 McDonalds and Blue Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Blue Water Global, you can compare the effects of market volatilities on McDonalds and Blue Water 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 McDonalds with a short position of Blue Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Blue Water.
Diversification Opportunities for McDonalds and Blue Water
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McDonalds and Blue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Blue Water Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Water Global and McDonalds 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 McDonalds are associated (or correlated) with Blue Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Water Global has no effect on the direction of McDonalds i.e., McDonalds and Blue Water go up and down completely randomly.
Pair Corralation between McDonalds and Blue Water
If you would invest 25,823 in McDonalds on August 31, 2024 and sell it today you would earn a total of 3,778 from holding McDonalds or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
McDonalds vs. Blue Water Global
Performance |
| Timeline |
| McDonalds |
| Blue Water Global |
McDonalds and Blue Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Blue Water
The main advantage of trading using opposite McDonalds and Blue Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Blue Water 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 Blue Water will offset losses from the drop in Blue Water's long position.| McDonalds vs. RLJ Lodging Trust | McDonalds vs. Aquagold International | McDonalds vs. Stepstone Group | McDonalds vs. Morningstar Unconstrained Allocation |
| Blue Water vs. BJs Restaurants | Blue Water vs. Cracker Barrel Old | Blue Water vs. Grillit | Blue Water vs. ZA Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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