McDonalds Stock Volatility

MCD
 Stock
  

USD 262.18  2.90  1.12%   

We consider McDonalds Corp very steady. McDonalds Corp has Sharpe Ratio of 0.1, which conveys that the firm had 0.1% of return per unit of risk over the last 3 months. Our approach to estimating the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for McDonalds Corp, which you can use to evaluate the future volatility of the firm. Please verify McDonalds Corp risk adjusted performance of 0.1141, and Mean Deviation of 0.9388 to check out if the risk estimate we provide is consistent with the expected return of 0.13%.
  
McDonalds Corp Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of McDonalds daily returns, and it is calculated using variance and standard deviation. We also use McDonalds's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of McDonalds Corp volatility.

30 Days Market Risk

Very steady

Chance of Distress

30 Days Economic Sensitivity

Follows the market closely

ESG Sustainability

While most ESG disclosures are voluntary, McDonalds Corp's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to McDonalds Corp's managers and investors.
Environment Score
Governance Score
Social Score
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as McDonalds Corp can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of McDonalds Corp at lower prices. For example, an investor can purchase McDonalds stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of McDonalds Corp's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving together with McDonalds Corp

0.85ARKRArk Restaurants CpPairCorr

Moving against McDonalds Corp

0.72BDLFlanigans EnterprisesPairCorr

McDonalds Corp Market Sensitivity And Downside Risk

McDonalds Corp's beta coefficient measures the volatility of McDonalds stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents McDonalds stock's returns against your selected market. In other words, McDonalds Corp's beta of 0.64 provides an investor with an approximation of how much risk McDonalds Corp stock can potentially add to one of your existing portfolios.
McDonalds Corp has relatively low volatility with skewness of -0.25 and kurtosis of 1.49. However, we advise all investors to independently investigate McDonalds Corp to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure McDonalds Corp's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact McDonalds Corp's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

McDonalds Corp Implied Volatility

McDonalds Corp's implied volatility exposes the market's sentiment of McDonalds Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if McDonalds Corp's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that McDonalds Corp stock will not fluctuate a lot when McDonalds Corp's options are near their expiration.
3 Months Beta |Analyze McDonalds Corp Demand Trend
Check current 90 days McDonalds Corp correlation with market (DOW)

McDonalds Beta

    
  0.64  
McDonalds standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  1.28  
It is essential to understand the difference between upside risk (as represented by McDonalds Corp's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of McDonalds Corp stock's daily returns or price. Since the actual investment returns on holding a position in McDonalds Corp stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in McDonalds Corp.

Using McDonalds Put Option to Manage Risk

Put options written on McDonalds Corp grant holders of the option the right to sell a specified amount of McDonalds Corp at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of McDonalds Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge McDonalds Corp's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding McDonalds Corp will be realized, the loss incurred will be offset by the profits made with the option trade.

McDonalds Corp's PUT expiring on 2022-08-19

   Profit   
Share
       McDonalds Corp Price At Expiration  

Current McDonalds Corp Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-08-19 PUT at $200.0-0.00253.0E-410612022-08-190.0 - 0.030.02View
Put
2022-08-19 PUT at $205.0-0.00284.0E-4272022-08-190.0 - 0.030.03View
Put
2022-08-19 PUT at $210.0-0.0034.0E-413982022-08-190.01 - 0.030.02View
Put
2022-08-19 PUT at $215.0-0.00335.0E-41572022-08-190.0 - 0.030.02View
Put
2022-08-19 PUT at $220.0-0.00214.0E-429142022-08-190.01 - 0.030.01View
Put
2022-08-19 PUT at $225.0-0.00418.0E-49002022-08-190.0 - 0.160.02View
Put
2022-08-19 PUT at $230.0-0.00650.001326032022-08-190.02 - 0.040.03View
Put
2022-08-19 PUT at $232.5-0.00880.00181432022-08-190.03 - 0.050.04View
Put
2022-08-19 PUT at $235.0-0.01130.00239522022-08-190.03 - 0.060.05View
Put
2022-08-19 PUT at $237.5-0.01220.0027922022-08-190.04 - 0.060.05View
Put
2022-08-19 PUT at $240.0-0.01540.00369912022-08-190.05 - 0.070.06View
View All McDonalds Corp Options

McDonalds Corp Stock Volatility Analysis

Volatility refers to the frequency at which McDonalds Corp stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with McDonalds Corp's price changes. Investors will then calculate the volatility of McDonalds Corp's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of McDonalds Corp's volatility:

Historical Volatility

This type of stock volatility measures McDonalds Corp's fluctuations based on previous trends. It's commonly used to predict McDonalds Corp's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for McDonalds Corp's current market price. This means that the stock will return to its initially predicted market price.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. McDonalds Corp Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
.

McDonalds Corp Projected Return Density Against Market

Considering the 90-day investment horizon McDonalds Corp has a beta of 0.6362 . This indicates as returns on the market go up, McDonalds Corp average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding McDonalds Corp will be expected to be much smaller as well.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to McDonalds Corp or Consumer Cyclical sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that McDonalds Corp stock's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a McDonalds stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has an alpha of 0.0593, implying that it can generate a 0.0593 percent excess return over DOW after adjusting for the inherited market risk (beta).
   Predicted Return Density   
       Returns  
McDonalds Corp's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how McDonalds Corp stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Company's Stock Price Volatility?

Several factors can influence a company's stock volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

McDonalds Corp Stock Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to McDonalds Corp or Consumer Cyclical sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that McDonalds Corp stock's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a McDonalds stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Considering the 90-day investment horizon the coefficient of variation of McDonalds Corp is 981.51. The daily returns are distributed with a variance of 1.65 and standard deviation of 1.28. The mean deviation of McDonalds Corp is currently at 0.96. For similar time horizon, the selected benchmark (DOW) has volatility of 1.25
α
Alpha over DOW
0.06
β
Beta against DOW0.64
σ
Overall volatility
1.28
Ir
Information ratio 0.0265

McDonalds Corp Stock Return Volatility

McDonalds Corp historical daily return volatility represents how much McDonalds Corp stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The firm has volatility of 1.2839% on return distribution over 90 days investment horizon. By contrast, DOW inherits 1.2609% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About McDonalds Corp Volatility

Volatility is a rate at which the price of McDonalds Corp or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of McDonalds Corp may increase or decrease. In other words, similar to McDonalds's beta indicator, it measures the risk of McDonalds Corp and helps estimate the fluctuations that may happen in a short period of time. So if prices of McDonalds Corp fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Last ReportedProjected for 2022
Market Capitalization200.3 B177.6 B
McDonalds Corporation operates and franchises McDonalds restaurants in the United States and internationally. McDonalds Corporation was founded in 1940 and is headquartered in Chicago, Illinois. McDonalds Corp operates under Restaurants classification in the United States and is traded on New York Stock Exchange. It employs 100000 people.

McDonalds Corp Investment Opportunity

McDonalds Corp has a volatility of 1.28 and is 1.02 times more volatile than DOW. 11  of all equities and portfolios are less risky than McDonalds Corp. Compared to the overall equity markets, volatility of historical daily returns of McDonalds Corp is lower than 11 () of all global equities and portfolios over the last 90 days.
Use McDonalds Corp to enhance the returns of your portfolios. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a large bullish trend. Check odds of McDonalds Corp to be traded at $288.4 in 90 days. .

Poor diversification

The correlation between McDonalds Corp and DJI is Poor diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds Corp and DJI in the same portfolio, assuming nothing else is changed.

McDonalds Corp Additional Risk Indicators

The analysis of McDonalds Corp's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in McDonalds Corp's investment and either accepting that risk or mitigating it. Along with some common measures of McDonalds Corp stock risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Risk Adjusted Performance0.1141
Market Risk Adjusted Performance0.1746
Mean Deviation0.9388
Semi Deviation1.09
Downside Deviation1.19
Coefficient Of Variation1097.32
Standard Deviation1.26
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stock investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

McDonalds Corp Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against McDonalds Corp as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. McDonalds Corp's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, McDonalds Corp's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to McDonalds Corp.
Additionally, see Stocks Correlation. Note that the McDonalds Corp information on this page should be used as a complementary analysis to other McDonalds Corp's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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When running McDonalds Corp price analysis, check to measure McDonalds Corp's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy McDonalds Corp is operating at the current time. Most of McDonalds Corp's value examination focuses on studying past and present price action to predict the probability of McDonalds Corp's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move McDonalds Corp's price. Additionally, you may evaluate how the addition of McDonalds Corp to your portfolios can decrease your overall portfolio volatility.
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Is McDonalds Corp's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of McDonalds Corp. If investors know McDonalds will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about McDonalds Corp listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
-0.46
Market Capitalization
192.9 B
Quarterly Revenue Growth YOY
-0.029
Return On Assets
0.13
The market value of McDonalds Corp is measured differently than its book value, which is the value of McDonalds that is recorded on the company's balance sheet. Investors also form their own opinion of McDonalds Corp's value that differs from its market value or its book value, called intrinsic value, which is McDonalds Corp's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because McDonalds Corp's market value can be influenced by many factors that don't directly affect McDonalds Corp's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between McDonalds Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine McDonalds Corp value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, McDonalds Corp's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.