Correlation Between McDonalds and Unified Series

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

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

Diversification Opportunities for McDonalds and Unified Series

-0.38

Correlation Coefficient

McDonalds  Unified Series

Very good diversification

The 3 months correlation between McDonalds and Unified is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Unified Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unified Series Trust 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 Unified Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unified Series Trust has no effect on the direction of McDonalds i.e., McDonalds and Unified Series go up and down completely randomly.

Pair Corralation between McDonalds and Unified Series

Considering the 90-day investment horizon McDonalds is expected to under-perform the Unified Series. In addition to that, McDonalds is 1.28 times more volatile than Unified Series Trust. It trades about -0.11 of its total potential returns per unit of risk. Unified Series Trust is currently generating about 0.05 per unit of volatility. If you would invest  2,564  in Unified Series Trust on January 24, 2024 and sell it today you would earn a total of  60.00  from holding Unified Series Trust or generate 2.34% return on investment over 90 days.

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

McDonalds  vs.  Unified Series Trust

McDonalds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days McDonalds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Unified Series Trust

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unified Series Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Unified Series is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with McDonalds and Unified Series

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

The idea behind McDonalds and Unified Series Trust 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.