Correlation Between BreadTalk Group and McDonalds
Can any of the company-specific risk be diversified away by investing in both BreadTalk Group and McDonalds 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 BreadTalk Group and McDonalds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BreadTalk Group Limited and McDonalds, you can compare the effects of market volatilities on BreadTalk Group and McDonalds 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 BreadTalk Group with a short position of McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of BreadTalk Group and McDonalds.
Diversification Opportunities for BreadTalk Group and McDonalds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BreadTalk and McDonalds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BreadTalk Group Limited and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds and BreadTalk Group 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 BreadTalk Group Limited are associated (or correlated) with McDonalds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds has no effect on the direction of BreadTalk Group i.e., BreadTalk Group and McDonalds go up and down completely randomly.
Pair Corralation between BreadTalk Group and McDonalds
If you would invest 23,587 in McDonalds on January 20, 2024 and sell it today you would earn a total of 3,612 from holding McDonalds or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
BreadTalk Group Limited vs. McDonalds
Performance |
| Timeline |
| BreadTalk Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| McDonalds |
BreadTalk Group and McDonalds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BreadTalk Group and McDonalds
The main advantage of trading using opposite BreadTalk Group and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BreadTalk Group position performs unexpectedly, McDonalds 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 McDonalds will offset losses from the drop in McDonalds' long position.| BreadTalk Group vs. Paysafe | BreadTalk Group vs. Where Food Comes | BreadTalk Group vs. Mediag3 | BreadTalk Group vs. National CineMedia |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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