Correlation Between McDonalds and Fuhkbx
Can any of the company-specific risk be diversified away by investing in both McDonalds and Fuhkbx 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 Fuhkbx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Fuhkbx, you can compare the effects of market volatilities on McDonalds and Fuhkbx 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 Fuhkbx. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Fuhkbx.
Diversification Opportunities for McDonalds and Fuhkbx
Excellent diversification
The 3 months correlation between McDonalds and Fuhkbx is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Fuhkbx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuhkbx 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 Fuhkbx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuhkbx has no effect on the direction of McDonalds i.e., McDonalds and Fuhkbx go up and down completely randomly.
Pair Corralation between McDonalds and Fuhkbx
Considering the 90-day investment horizon McDonalds is expected to under-perform the Fuhkbx. In addition to that, McDonalds is 1.29 times more volatile than Fuhkbx. It trades about -0.06 of its total potential returns per unit of risk. Fuhkbx is currently generating about 0.09 per unit of volatility. If you would invest 937.00 in Fuhkbx on May 6, 2025 and sell it today you would earn a total of 37.00 from holding Fuhkbx or generate 3.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
McDonalds vs. Fuhkbx
Performance |
Timeline |
McDonalds |
Fuhkbx |
McDonalds and Fuhkbx Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with McDonalds and Fuhkbx
The main advantage of trading using opposite McDonalds and Fuhkbx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Fuhkbx 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 Fuhkbx will offset losses from the drop in Fuhkbx's long position.McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Dutch Bros | McDonalds vs. Dominos Pizza Common | McDonalds vs. Yum Brands |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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