Correlation Between McDonalds and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both McDonalds and Hawaiian Electric 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 Hawaiian Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Hawaiian Electric, you can compare the effects of market volatilities on McDonalds and Hawaiian Electric 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 Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Hawaiian Electric.
Diversification Opportunities for McDonalds and Hawaiian Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McDonalds and Hawaiian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Hawaiian Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric 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 Hawaiian Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Electric has no effect on the direction of McDonalds i.e., McDonalds and Hawaiian Electric go up and down completely randomly.
Pair Corralation between McDonalds and Hawaiian Electric
If you would invest 29,060 in McDonalds on September 12, 2024 and sell it today you would earn a total of 549.00 from holding McDonalds or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 25.0% |
| Values | Daily Returns |
McDonalds vs. Hawaiian Electric
Performance |
| Timeline |
| McDonalds |
| Hawaiian Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McDonalds and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Hawaiian Electric
The main advantage of trading using opposite McDonalds and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Hawaiian Electric 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 Hawaiian Electric will offset losses from the drop in Hawaiian Electric's long position.| McDonalds vs. Nathans Famous | McDonalds vs. Flanigans Enterprises | McDonalds vs. Good Times Restaurants | McDonalds vs. Auburn National Bancorporation |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |