Correlation Between McDonalds and ADGLXY

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

By analyzing existing cross correlation between McDonalds and ADGLXY 294 30 SEP 40, you can compare the effects of market volatilities on McDonalds and ADGLXY 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 ADGLXY. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and ADGLXY.

Diversification Opportunities for McDonalds and ADGLXY

0.0

Correlation Coefficient

McDonalds  ADGLXY

Pay attention - limited upside

The 3 months correlation between McDonalds and ADGLXY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and ADGLXY 294 30 SEP 40 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADGLXY 294 30 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 ADGLXY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADGLXY 294 30 has no effect on the direction of McDonalds i.e., McDonalds and ADGLXY go up and down completely randomly.

Pair Corralation between McDonalds and ADGLXY

If you would invest  29,492  in McDonalds on September 14, 2024 and sell it today you would earn a total of  171.00  from holding McDonalds or generate 0.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

McDonalds  vs.  ADGLXY 294 30 SEP 40

McDonalds

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in McDonalds are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, McDonalds is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ADGLXY 294 30

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADGLXY 294 30 SEP 40 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ADGLXY 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 ADGLXY

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

The idea behind McDonalds and ADGLXY 294 30 SEP 40 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.