Correlation Between McDonalds Corp and 1stdibs

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both McDonalds Corp and 1stdibs 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 Corp and 1stdibs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds Corp and 1stdibs, you can compare the effects of market volatilities on McDonalds Corp and 1stdibs 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 Corp with a short position of 1stdibs. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds Corp and 1stdibs.

Diversification Opportunities for McDonalds Corp and 1stdibs

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between McDonalds and 1stdibs is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds Corp and 1stdibs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1stdibs and McDonalds Corp 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 Corp are associated (or correlated) with 1stdibs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1stdibs has no effect on the direction of McDonalds Corp i.e., McDonalds Corp and 1stdibs go up and down completely randomly.

Pair Corralation between McDonalds Corp and 1stdibs

Considering the 90-day investment horizon McDonalds Corp is expected to under-perform the 1stdibs. But the stock apears to be less risky and, when comparing its historical volatility, McDonalds Corp is 4.7 times less risky than 1stdibs. The stock trades about -0.24 of its potential returns per unit of risk. The 1stdibs is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  648.00  in 1stdibs on June 29, 2022 and sell it today you would lose (40.00)  from holding 1stdibs or give up 6.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

McDonalds Corp  vs.  1stdibs

 Performance (%) 
       Timeline  
McDonalds Corp 
McDonalds Performance
0 of 100
Over the last 90 days McDonalds Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, McDonalds Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

McDonalds Price Channel

1stdibs 
1stdibs Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in 1stdibs are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental drivers, 1stdibs may actually be approaching a critical reversion point that can send shares even higher in October 2022.

1stdibs Price Channel

McDonalds Corp and 1stdibs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with McDonalds Corp and 1stdibs

The main advantage of trading using opposite McDonalds Corp and 1stdibs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds Corp position performs unexpectedly, 1stdibs 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 1stdibs will offset losses from the drop in 1stdibs' long position.
McDonalds Corp vs. Kibush Capital Corp
The idea behind McDonalds Corp and 1stdibs 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.
1stdibs vs. Clearwater Paper Corp
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go