Correlation Between McDonalds and EXXON
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By analyzing existing cross correlation between McDonalds and EXXON MOBIL P, you can compare the effects of market volatilities on McDonalds and EXXON 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 EXXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and EXXON.
Diversification Opportunities for McDonalds and EXXON
Very good diversification
The 3 months correlation between McDonalds and EXXON is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and EXXON MOBIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXXON MOBIL P 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 EXXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXXON MOBIL P has no effect on the direction of McDonalds i.e., McDonalds and EXXON go up and down completely randomly.
Pair Corralation between McDonalds and EXXON
Considering the 90-day investment horizon McDonalds is expected to generate 1.0 times more return on investment than EXXON. However, McDonalds is 1.0 times less risky than EXXON. It trades about 0.05 of its potential returns per unit of risk. EXXON MOBIL P is currently generating about 0.04 per unit of risk. If you would invest 25,164 in McDonalds on August 25, 2024 and sell it today you would earn a total of 3,864 from holding McDonalds or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.59% |
| Values | Daily Returns |
McDonalds vs. EXXON MOBIL P
Performance |
| Timeline |
| McDonalds |
| EXXON MOBIL P |
McDonalds and EXXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and EXXON
The main advantage of trading using opposite McDonalds and EXXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, EXXON 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 EXXON will offset losses from the drop in EXXON's long position.| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Eshallgo Class A | McDonalds vs. Amtech Systems | McDonalds vs. Gold Fields Ltd |
| EXXON vs. Albertsons Companies | EXXON vs. Beyond Meat | EXXON vs. Marfrig Global Foods | EXXON vs. Acumen Pharmaceuticals |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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