Correlation Between McDonalds and KORE Mining
Can any of the company-specific risk be diversified away by investing in both McDonalds and KORE Mining 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 KORE Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and KORE Mining, you can compare the effects of market volatilities on McDonalds and KORE Mining 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 KORE Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and KORE Mining.
Diversification Opportunities for McDonalds and KORE Mining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McDonalds and KORE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and KORE Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORE Mining 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 KORE Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORE Mining has no effect on the direction of McDonalds i.e., McDonalds and KORE Mining go up and down completely randomly.
Pair Corralation between McDonalds and KORE Mining
Considering the 90-day investment horizon McDonalds is expected to under-perform the KORE Mining. But the stock apears to be less risky and, when comparing its historical volatility, McDonalds is 7.46 times less risky than KORE Mining. The stock trades about -0.04 of its potential returns per unit of risk. The KORE Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2.80 in KORE Mining on August 29, 2024 and sell it today you would lose (0.26) from holding KORE Mining or give up 9.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McDonalds vs. KORE Mining
Performance |
| Timeline |
| McDonalds |
| KORE Mining |
McDonalds and KORE Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and KORE Mining
The main advantage of trading using opposite McDonalds and KORE Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, KORE Mining 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 KORE Mining will offset losses from the drop in KORE Mining's long position.| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Dutch Bros | McDonalds vs. Dominos Pizza | McDonalds vs. Yum Brands |
| KORE Mining vs. Vertiv Holdings Co | KORE Mining vs. Nasdaq Inc | KORE Mining vs. McDonalds | KORE Mining vs. Walmart |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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