Correlation Between McDonalds and Charah Solutions
Can any of the company-specific risk be diversified away by investing in both McDonalds and Charah Solutions 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 Charah Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Charah Solutions, you can compare the effects of market volatilities on McDonalds and Charah Solutions 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 Charah Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Charah Solutions.
Diversification Opportunities for McDonalds and Charah Solutions
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McDonalds and Charah is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Charah Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charah Solutions 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 Charah Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charah Solutions has no effect on the direction of McDonalds i.e., McDonalds and Charah Solutions go up and down completely randomly.
Pair Corralation between McDonalds and Charah Solutions
If you would invest 26,254 in McDonalds on September 1, 2024 and sell it today you would earn a total of 3,347 from holding McDonalds or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.37% |
| Values | Daily Returns |
McDonalds vs. Charah Solutions
Performance |
| Timeline |
| McDonalds |
| Charah Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McDonalds and Charah Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Charah Solutions
The main advantage of trading using opposite McDonalds and Charah Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Charah Solutions 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 Charah Solutions will offset losses from the drop in Charah Solutions' long position.| McDonalds vs. The Wendys Co | McDonalds vs. Shake Shack | McDonalds vs. Papa Johns International | McDonalds vs. Darden Restaurants |
| Charah Solutions vs. BluMetric Environmental | Charah Solutions vs. Agilyx AS | Charah Solutions vs. BacTech Environmental | Charah Solutions vs. EcoPlus |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |