Correlation Between McDonalds and Anfield Dynamic

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Can any of the company-specific risk be diversified away by investing in both McDonalds and Anfield Dynamic 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 Anfield Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Anfield Dynamic Fixed, you can compare the effects of market volatilities on McDonalds and Anfield Dynamic 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 Anfield Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Anfield Dynamic.

Diversification Opportunities for McDonalds and Anfield Dynamic

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between McDonalds and Anfield is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Anfield Dynamic Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Dynamic Fixed 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 Anfield Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Dynamic Fixed has no effect on the direction of McDonalds i.e., McDonalds and Anfield Dynamic go up and down completely randomly.

Pair Corralation between McDonalds and Anfield Dynamic

Considering the 90-day investment horizon McDonalds is expected to generate 25.15 times less return on investment than Anfield Dynamic. In addition to that, McDonalds is 1.41 times more volatile than Anfield Dynamic Fixed. It trades about 0.01 of its total potential returns per unit of risk. Anfield Dynamic Fixed is currently generating about 0.38 per unit of volatility. If you would invest  815.00  in Anfield Dynamic Fixed on September 5, 2022 and sell it today you would earn a total of  38.00  from holding Anfield Dynamic Fixed or generate 4.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

McDonalds  vs.  Anfield Dynamic Fixed

 Performance (%) 
       Timeline  
McDonalds 
McDonalds Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in McDonalds are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish fundamental indicators, McDonalds may actually be approaching a critical reversion point that can send shares even higher in January 2023.

McDonalds Price Channel

Anfield Dynamic Fixed 
Anfield Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Dynamic Fixed are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Anfield Price Channel

McDonalds and Anfield Dynamic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with McDonalds and Anfield Dynamic

The main advantage of trading using opposite McDonalds and Anfield Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Anfield Dynamic 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 Anfield Dynamic will offset losses from the drop in Anfield Dynamic's long position.
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The idea behind McDonalds and Anfield Dynamic Fixed 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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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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