Correlation Between Mercedes Benz and McDonalds
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and McDonalds 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 Mercedes Benz and McDonalds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group and McDonalds, you can compare the effects of market volatilities on Mercedes Benz 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 Mercedes Benz with a short position of McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and McDonalds.
Diversification Opportunities for Mercedes Benz and McDonalds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercedes and McDonalds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds and Mercedes Benz 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 Mercedes Benz Group 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 Mercedes Benz i.e., Mercedes Benz and McDonalds go up and down completely randomly.
Pair Corralation between Mercedes Benz and McDonalds
If you would invest (100.00) in Mercedes Benz Group on January 29, 2024 and sell it today you would earn a total of 100.00 from holding Mercedes Benz Group or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Mercedes Benz Group vs. McDonalds
Performance |
Timeline |
Mercedes Benz Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McDonalds |
Mercedes Benz and McDonalds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mercedes Benz and McDonalds
The main advantage of trading using opposite Mercedes Benz and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz 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.Mercedes Benz vs. Kite Realty Group | Mercedes Benz vs. Alternative Investment | Mercedes Benz vs. Summit Environmental | Mercedes Benz vs. Summit Hotel Properties |
McDonalds vs. Yatra Online | McDonalds vs. Despegar Corp | McDonalds vs. Lindblad Expeditions Holdings | McDonalds vs. MakeMyTrip Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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