Correlation Between 552953CD1 and McDonalds
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By analyzing existing cross correlation between MGM Resorts International and McDonalds, you can compare the effects of market volatilities on 552953CD1 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 552953CD1 with a short position of McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of 552953CD1 and McDonalds.
Diversification Opportunities for 552953CD1 and McDonalds
Significant diversification
The 3 months correlation between 552953CD1 and McDonalds is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding MGM Resorts International and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds and 552953CD1 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 MGM Resorts International 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 552953CD1 i.e., 552953CD1 and McDonalds go up and down completely randomly.
Pair Corralation between 552953CD1 and McDonalds
Assuming the 90 days trading horizon MGM Resorts International is expected to generate 45.38 times more return on investment than McDonalds. However, 552953CD1 is 45.38 times more volatile than McDonalds. It trades about 0.04 of its potential returns per unit of risk. McDonalds is currently generating about 0.03 per unit of risk. If you would invest 9,295 in MGM Resorts International on August 30, 2024 and sell it today you would earn a total of 239.00 from holding MGM Resorts International or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.57% |
| Values | Daily Returns |
MGM Resorts International vs. McDonalds
Performance |
| Timeline |
| MGM Resorts International |
| McDonalds |
552953CD1 and McDonalds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 552953CD1 and McDonalds
The main advantage of trading using opposite 552953CD1 and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 552953CD1 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.| 552953CD1 vs. AEP TEX INC | 552953CD1 vs. US BANK NATIONAL | 552953CD1 vs. Nasdaq Inc | 552953CD1 vs. Vertiv Holdings Co |
| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Dutch Bros | McDonalds vs. Dominos Pizza | McDonalds vs. Yum Brands |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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