Correlation Between McDonalds and Gamida Cell

Can any of the company-specific risk be diversified away by investing in both McDonalds and Gamida Cell 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 Gamida Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between McDonalds and Gamida Cell, you can compare the effects of market volatilities on McDonalds and Gamida Cell 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 Gamida Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Gamida Cell.

Diversification Opportunities for McDonalds and Gamida Cell

0.0

Correlation Coefficient

McDonalds  Gamida Cell

Pay attention - limited upside

The 3 months correlation between McDonalds and Gamida is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Gamida Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamida Cell 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 Gamida Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamida Cell has no effect on the direction of McDonalds i.e., McDonalds and Gamida Cell go up and down completely randomly.

Pair Corralation between McDonalds and Gamida Cell

If you would invest  28,794  in McDonalds on December 29, 2024 and sell it today you would earn a total of  1,915  from holding McDonalds or generate 6.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

McDonalds  vs.  Gamida Cell

McDonalds

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in McDonalds are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, McDonalds may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Gamida Cell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamida Cell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Gamida Cell is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with McDonalds and Gamida Cell

The main advantage of trading using opposite McDonalds and Gamida Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Gamida Cell 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 Gamida Cell will offset losses from the drop in Gamida Cell's long position.

The idea behind McDonalds and Gamida Cell 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.