Correlation Between McDonalds and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both McDonalds and Barclays Capital 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 Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Barclays Capital, you can compare the effects of market volatilities on McDonalds and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Barclays Capital.
Diversification Opportunities for McDonalds and Barclays Capital
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between McDonalds and Barclays is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of McDonalds i.e., McDonalds and Barclays Capital go up and down completely randomly.
Pair Corralation between McDonalds and Barclays Capital
If you would invest 2,460 in Barclays Capital on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Barclays Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
McDonalds vs. Barclays Capital
Performance |
| Timeline |
| McDonalds |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McDonalds and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Barclays Capital
The main advantage of trading using opposite McDonalds and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Dutch Bros | McDonalds vs. Dominos Pizza | McDonalds vs. Yum Brands |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |