Correlation Between McDonalds and AXS 125X
Can any of the company-specific risk be diversified away by investing in both McDonalds and AXS 125X 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 AXS 125X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and AXS 125X NVDA, you can compare the effects of market volatilities on McDonalds and AXS 125X 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 AXS 125X. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and AXS 125X.
Diversification Opportunities for McDonalds and AXS 125X
Very good diversification
The 3 months correlation between McDonalds and AXS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and AXS 125X NVDA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXS 125X NVDA 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 AXS 125X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXS 125X NVDA has no effect on the direction of McDonalds i.e., McDonalds and AXS 125X go up and down completely randomly.
Pair Corralation between McDonalds and AXS 125X
Considering the 90-day investment horizon McDonalds is expected to generate 0.18 times more return on investment than AXS 125X. However, McDonalds is 5.43 times less risky than AXS 125X. It trades about 0.03 of its potential returns per unit of risk. AXS 125X NVDA is currently generating about -0.13 per unit of risk. If you would invest 26,127 in McDonalds on August 30, 2024 and sell it today you would earn a total of 3,381 from holding McDonalds or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McDonalds vs. AXS 125X NVDA
Performance |
| Timeline |
| McDonalds |
| AXS 125X NVDA |
McDonalds and AXS 125X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and AXS 125X
The main advantage of trading using opposite McDonalds and AXS 125X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, AXS 125X 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 AXS 125X will offset losses from the drop in AXS 125X'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| 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 | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |