Correlation Between McDonalds and Sadot

Can any of the company-specific risk be diversified away by investing in both McDonalds and Sadot 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 Sadot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between McDonalds and Sadot Group, you can compare the effects of market volatilities on McDonalds and Sadot 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 Sadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Sadot.

Diversification Opportunities for McDonalds and Sadot

0.55

Correlation Coefficient

McDonalds  Sadot

Very weak diversification

The 3 months correlation between McDonalds and Sadot is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Sadot Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sadot Group 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 Sadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sadot Group has no effect on the direction of McDonalds i.e., McDonalds and Sadot go up and down completely randomly.

Pair Corralation between McDonalds and Sadot

Considering the 90-day investment horizon McDonalds is expected to generate 0.1 times more return on investment than Sadot. However, McDonalds is 9.74 times less risky than Sadot. It trades about -0.02 of its potential returns per unit of risk. Sadot Group is currently generating about -0.02 per unit of risk. If you would invest  30,252  in McDonalds on August 3, 2025 and sell it today you would lose (409.00) from holding McDonalds or give up 1.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

McDonalds  vs.  Sadot Group

McDonalds

Risk-Adjusted Performance

Weakest

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

Sadot Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Sadot Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with McDonalds and Sadot

The main advantage of trading using opposite McDonalds and Sadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Sadot 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 Sadot will offset losses from the drop in Sadot's long position.

The idea behind McDonalds and Sadot Group 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.