Correlation Between McDonalds and Consolidated
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By analyzing existing cross correlation between McDonalds and Consolidated Energy 65, you can compare the effects of market volatilities on McDonalds and Consolidated 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 Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Consolidated.
Diversification Opportunities for McDonalds and Consolidated
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McDonalds and Consolidated is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Consolidated Energy 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Energy 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 Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Energy has no effect on the direction of McDonalds i.e., McDonalds and Consolidated go up and down completely randomly.
Pair Corralation between McDonalds and Consolidated
Considering the 90-day investment horizon McDonalds is expected to generate 1.01 times more return on investment than Consolidated. However, McDonalds is 1.01 times more volatile than Consolidated Energy 65. It trades about -0.25 of its potential returns per unit of risk. Consolidated Energy 65 is currently generating about -0.54 per unit of risk. If you would invest 29,129 in McDonalds on October 24, 2024 and sell it today you would lose (1,034) from holding McDonalds or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
McDonalds vs. Consolidated Energy 65
Performance |
| Timeline |
| McDonalds |
| Consolidated Energy |
McDonalds and Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Consolidated
The main advantage of trading using opposite McDonalds and Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Consolidated 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 Consolidated will offset losses from the drop in Consolidated's long position.| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Yum Brands | McDonalds vs. The Wendys Co | McDonalds vs. Wingstop |
| Consolidated vs. Park Electrochemical | Consolidated vs. Arq Inc | Consolidated vs. BJs Restaurants | Consolidated vs. DiamondRock Hospitality |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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