Correlation Between McDonalds and Helio
Can any of the company-specific risk be diversified away by investing in both McDonalds and Helio 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 Helio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Helio, you can compare the effects of market volatilities on McDonalds and Helio 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 Helio. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Helio.
Diversification Opportunities for McDonalds and Helio
Average diversification
The 3 months correlation between McDonalds and Helio is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Helio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helio 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 Helio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helio has no effect on the direction of McDonalds i.e., McDonalds and Helio go up and down completely randomly.
Pair Corralation between McDonalds and Helio
Considering the 90-day investment horizon McDonalds is expected to generate 13.0 times less return on investment than Helio. But when comparing it to its historical volatility, McDonalds is 9.9 times less risky than Helio. It trades about 0.14 of its potential returns per unit of risk. Helio is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Helio on December 11, 2024 and sell it today you would earn a total of 220.00 from holding Helio or generate 44.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
McDonalds vs. Helio
Performance |
| Timeline |
| McDonalds |
| Helio |
McDonalds and Helio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Helio
The main advantage of trading using opposite McDonalds and Helio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Helio 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 Helio will offset losses from the drop in Helio's long position.| McDonalds vs. MGM Resorts International | McDonalds vs. Caesars Entertainment | McDonalds vs. Melco Resorts Entertainment | McDonalds vs. Penn National Gaming |
| Helio vs. Anheuser Busch Inbev | Helio vs. Cebu Air ADR | Helio vs. AerSale Corp | Helio vs. Ryanair Holdings PLC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |