Correlation Between McDonalds and SOUTHERN
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By analyzing existing cross correlation between McDonalds and SOUTHERN CALIF GAS, you can compare the effects of market volatilities on McDonalds and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and SOUTHERN.
Diversification Opportunities for McDonalds and SOUTHERN
Poor diversification
The 3 months correlation between McDonalds and SOUTHERN is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and SOUTHERN CALIF GAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF GAS 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF GAS has no effect on the direction of McDonalds i.e., McDonalds and SOUTHERN go up and down completely randomly.
Pair Corralation between McDonalds and SOUTHERN
Considering the 90-day investment horizon McDonalds is expected to generate 0.79 times more return on investment than SOUTHERN. However, McDonalds is 1.27 times less risky than SOUTHERN. It trades about -0.04 of its potential returns per unit of risk. SOUTHERN CALIF GAS is currently generating about -0.1 per unit of risk. If you would invest 30,345 in McDonalds on September 3, 2024 and sell it today you would lose (744.00) from holding McDonalds or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.76% |
| Values | Daily Returns |
McDonalds vs. SOUTHERN CALIF GAS
Performance |
| Timeline |
| McDonalds |
| SOUTHERN CALIF GAS |
McDonalds and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and SOUTHERN
The main advantage of trading using opposite McDonalds and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| McDonalds vs. Highway Holdings Limited | McDonalds vs. QCR Holdings | McDonalds vs. Partner Communications | McDonalds vs. Acumen Pharmaceuticals |
| SOUTHERN vs. Hannon Armstrong Sustainable | SOUTHERN vs. SEI Investments | SOUTHERN vs. Nomura Holdings ADR | SOUTHERN vs. Skechers USA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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