Correlation Between McDonalds and Wayne Savings
Can any of the company-specific risk be diversified away by investing in both McDonalds and Wayne Savings 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 Wayne Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Wayne Savings Bancshares, you can compare the effects of market volatilities on McDonalds and Wayne Savings 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 Wayne Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Wayne Savings.
Diversification Opportunities for McDonalds and Wayne Savings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McDonalds and Wayne is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Wayne Savings Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayne Savings Bancshares 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 Wayne Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayne Savings Bancshares has no effect on the direction of McDonalds i.e., McDonalds and Wayne Savings go up and down completely randomly.
Pair Corralation between McDonalds and Wayne Savings
If you would invest 29,244 in McDonalds on December 2, 2024 and sell it today you would earn a total of 1,589 from holding McDonalds or generate 5.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
McDonalds vs. Wayne Savings Bancshares
Performance |
Timeline |
McDonalds |
Wayne Savings Bancshares |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
McDonalds and Wayne Savings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with McDonalds and Wayne Savings
The main advantage of trading using opposite McDonalds and Wayne Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Wayne Savings 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 Wayne Savings will offset losses from the drop in Wayne Savings' long position.McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Yum Brands | McDonalds vs. The Wendys Co | McDonalds vs. Wingstop |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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