Correlation Between McDonalds and Kinnate Biopharma
Can any of the company-specific risk be diversified away by investing in both McDonalds and Kinnate Biopharma 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 Kinnate Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Kinnate Biopharma, you can compare the effects of market volatilities on McDonalds and Kinnate Biopharma 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 Kinnate Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Kinnate Biopharma.
Diversification Opportunities for McDonalds and Kinnate Biopharma
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McDonalds and Kinnate is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Kinnate Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnate Biopharma 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 Kinnate Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnate Biopharma has no effect on the direction of McDonalds i.e., McDonalds and Kinnate Biopharma go up and down completely randomly.
Pair Corralation between McDonalds and Kinnate Biopharma
If you would invest 28,552 in McDonalds on September 2, 2024 and sell it today you would earn a total of 1,049 from holding McDonalds or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.56% |
| Values | Daily Returns |
McDonalds vs. Kinnate Biopharma
Performance |
| Timeline |
| McDonalds |
| Kinnate Biopharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McDonalds and Kinnate Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Kinnate Biopharma
The main advantage of trading using opposite McDonalds and Kinnate Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Kinnate Biopharma 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 Kinnate Biopharma will offset losses from the drop in Kinnate Biopharma's long position.The idea behind McDonalds and Kinnate Biopharma pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kinnate Biopharma vs. ACELYRIN, INC Common | Kinnate Biopharma vs. Windtree Therapeutics | Kinnate Biopharma vs. Palisade Bio | Kinnate Biopharma vs. Century Therapeutics |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |