Correlation Between McDonalds and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both McDonalds and Vivendi SA 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 Vivendi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Vivendi SA, you can compare the effects of market volatilities on McDonalds and Vivendi SA 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 Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Vivendi SA.
Diversification Opportunities for McDonalds and Vivendi SA
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McDonalds and Vivendi is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA 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 Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of McDonalds i.e., McDonalds and Vivendi SA go up and down completely randomly.
Pair Corralation between McDonalds and Vivendi SA
If you would invest 1,150 in Vivendi SA on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Vivendi SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
McDonalds vs. Vivendi SA
Performance |
| Timeline |
| McDonalds |
| Vivendi SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McDonalds and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Vivendi SA
The main advantage of trading using opposite McDonalds and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Vivendi SA 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Dominos Pizza Common | McDonalds vs. Yum Brands | McDonalds vs. The Wendys Co |
| Vivendi SA vs. Universal Music Group | Vivendi SA vs. Reservoir Media | Vivendi SA vs. Atlanta Braves Holdings, | Vivendi SA vs. Warner Music Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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