Correlation Between McDonalds and Golden Tag
Can any of the company-specific risk be diversified away by investing in both McDonalds and Golden Tag 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 Golden Tag into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Golden Tag Resources, you can compare the effects of market volatilities on McDonalds and Golden Tag 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 Golden Tag. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Golden Tag.
Diversification Opportunities for McDonalds and Golden Tag
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McDonalds and Golden is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Golden Tag Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tag Resources 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 Golden Tag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tag Resources has no effect on the direction of McDonalds i.e., McDonalds and Golden Tag go up and down completely randomly.
Pair Corralation between McDonalds and Golden Tag
If you would invest 28,229 in McDonalds on September 4, 2024 and sell it today you would earn a total of 1,015 from holding McDonalds or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.41% |
| Values | Daily Returns |
McDonalds vs. Golden Tag Resources
Performance |
| Timeline |
| McDonalds |
| Golden Tag Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McDonalds and Golden Tag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Golden Tag
The main advantage of trading using opposite McDonalds and Golden Tag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Golden Tag 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 Golden Tag will offset losses from the drop in Golden Tag's long position.| McDonalds vs. Hyatt Hotels | McDonalds vs. Smart Share Global | McDonalds vs. Sweetgreen | McDonalds vs. Wyndham Hotels Resorts |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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