Correlation Between VIAPLAY GROUP and McDonalds
Can any of the company-specific risk be diversified away by investing in both VIAPLAY GROUP and McDonalds 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 VIAPLAY GROUP and McDonalds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIAPLAY GROUP AB and McDonalds, you can compare the effects of market volatilities on VIAPLAY GROUP and McDonalds 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 VIAPLAY GROUP with a short position of McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIAPLAY GROUP and McDonalds.
Diversification Opportunities for VIAPLAY GROUP and McDonalds
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VIAPLAY and McDonalds is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding VIAPLAY GROUP AB and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds and VIAPLAY GROUP 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 VIAPLAY GROUP AB are associated (or correlated) with McDonalds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds has no effect on the direction of VIAPLAY GROUP i.e., VIAPLAY GROUP and McDonalds go up and down completely randomly.
Pair Corralation between VIAPLAY GROUP and McDonalds
Assuming the 90 days horizon VIAPLAY GROUP AB is expected to generate 20.38 times more return on investment than McDonalds. However, VIAPLAY GROUP is 20.38 times more volatile than McDonalds. It trades about 0.05 of its potential returns per unit of risk. McDonalds is currently generating about 0.05 per unit of risk. If you would invest 218.00 in VIAPLAY GROUP AB on September 1, 2024 and sell it today you would lose (211.98) from holding VIAPLAY GROUP AB or give up 97.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
VIAPLAY GROUP AB vs. McDonalds
Performance |
| Timeline |
| VIAPLAY GROUP AB |
| McDonalds |
VIAPLAY GROUP and McDonalds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIAPLAY GROUP and McDonalds
The main advantage of trading using opposite VIAPLAY GROUP and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIAPLAY GROUP position performs unexpectedly, McDonalds 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 McDonalds will offset losses from the drop in McDonalds' long position.| VIAPLAY GROUP vs. Netflix | VIAPLAY GROUP vs. Warner Music Group | VIAPLAY GROUP vs. Superior Plus Corp | VIAPLAY GROUP vs. NMI Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |