Correlation Between 577778BQ5 and McDonalds
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By analyzing existing cross correlation between MAY DEPT STORES and McDonalds, you can compare the effects of market volatilities on 577778BQ5 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 577778BQ5 with a short position of McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of 577778BQ5 and McDonalds.
Diversification Opportunities for 577778BQ5 and McDonalds
Modest diversification
The 3 months correlation between 577778BQ5 and McDonalds is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MAY DEPT STORES and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds and 577778BQ5 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 MAY DEPT STORES 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 577778BQ5 i.e., 577778BQ5 and McDonalds go up and down completely randomly.
Pair Corralation between 577778BQ5 and McDonalds
Assuming the 90 days trading horizon MAY DEPT STORES is expected to generate 4.3 times more return on investment than McDonalds. However, 577778BQ5 is 4.3 times more volatile than McDonalds. It trades about 0.03 of its potential returns per unit of risk. McDonalds is currently generating about 0.03 per unit of risk. If you would invest 8,636 in MAY DEPT STORES on September 3, 2024 and sell it today you would earn a total of 269.00 from holding MAY DEPT STORES or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.3% |
| Values | Daily Returns |
MAY DEPT STORES vs. McDonalds
Performance |
| Timeline |
| MAY DEPT STORES |
| McDonalds |
577778BQ5 and McDonalds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 577778BQ5 and McDonalds
The main advantage of trading using opposite 577778BQ5 and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 577778BQ5 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.The idea behind MAY DEPT STORES and McDonalds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| McDonalds vs. Highway Holdings Limited | McDonalds vs. QCR Holdings | McDonalds vs. Partner Communications | McDonalds 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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