Correlation Between McDonalds and Gogoro
Can any of the company-specific risk be diversified away by investing in both McDonalds and Gogoro 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 Gogoro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Gogoro Inc, you can compare the effects of market volatilities on McDonalds and Gogoro 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 Gogoro. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Gogoro.
Diversification Opportunities for McDonalds and Gogoro
Very good diversification
The 3 months correlation between McDonalds and Gogoro is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Gogoro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gogoro Inc 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 Gogoro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gogoro Inc has no effect on the direction of McDonalds i.e., McDonalds and Gogoro go up and down completely randomly.
Pair Corralation between McDonalds and Gogoro
Considering the 90-day investment horizon McDonalds is expected to generate 112.89 times less return on investment than Gogoro. But when comparing it to its historical volatility, McDonalds is 5.88 times less risky than Gogoro. It trades about 0.01 of its potential returns per unit of risk. Gogoro Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Gogoro Inc on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Gogoro Inc or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McDonalds vs. Gogoro Inc
Performance |
| Timeline |
| McDonalds |
| Gogoro Inc |
McDonalds and Gogoro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Gogoro
The main advantage of trading using opposite McDonalds and Gogoro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Gogoro 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 Gogoro will offset losses from the drop in Gogoro's long position.| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Dutch Bros | McDonalds vs. Dominos Pizza | McDonalds vs. Yum Brands |
| Gogoro vs. Motorcar Parts of | Gogoro vs. Stoneridge | Gogoro vs. Superior Industries International | Gogoro vs. Lear Corporation |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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