# McDonalds Stock Volatility

MCD Stock | USD 284.54 3.89 1.35% |

We consider McDonalds very steady. McDonalds has Sharpe Ratio of 0.17, which conveys that the firm had 0.17% 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, which you can use to evaluate the future volatility of the firm. Please verify McDonalds mean deviation of 0.5269, and Risk Adjusted Performance of 0.1603 to check out if the risk estimate we provide is consistent with the expected return of 0.12%.

McDonalds |

McDonalds 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 volatility.

### 450 Days Market Risk

### Chance of Distress

### 450 Days Economic Sensitivity

### ESG Sustainability

While most ESG disclosures are voluntary, McDonalds' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to McDonalds' 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 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 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' 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 Stock

+ | 0.84 | WW | WW International | Fiscal Quarter End 30th of June 2023 | PairCorr | ||

+ | 0.75 | DKNG | DraftKings | Aggressive Push | PairCorr | ||

+ | 0.83 | WING | Wingstop | Fiscal Quarter End 30th of June 2023 | PairCorr |

## Moving against McDonalds Stock

- | 0.83 | CSV | Carriage Services | Fiscal Quarter End 30th of June 2023 | PairCorr | ||

- | 0.76 | EVRI | Everi Holdings | Fiscal Quarter End 30th of June 2023 | PairCorr | ||

- | 0.7 | AGS | PlayAGS | Fiscal Quarter End 30th of June 2023 | PairCorr |

## McDonalds Market Sensitivity And Downside Risk

McDonalds' 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's beta of 0.49 provides an investor with an approximation of how much risk McDonalds stock can potentially add to one of your existing portfolios.

McDonalds exhibits relatively low volatility with skewness of -0.45 and kurtosis of 0.89. However, we advice investors to further investigate McDonalds to ensure all market statistics is disseminated and is consistent with investors' estimations about McDonalds upside potential. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure McDonalds' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact McDonalds' 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.

3 Months Beta |Analyze McDonalds Demand TrendCheck current 90 days McDonalds correlation with market (NYSE Composite)## McDonalds Beta |

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 | 0.72 |

It is essential to understand the difference between upside risk (as represented by McDonalds's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of McDonalds' daily returns or price. Since the actual investment returns on holding a position in mcdonalds 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.

## Using McDonalds Put Option to Manage Risk

Put options written on McDonalds grant holders of the option the right to sell a specified amount of McDonalds 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' 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 will be realized, the loss incurred will be offset by the profits made with the option trade.

### McDonalds' PUT expiring on 2023-06-09

Profit |

McDonalds Price At Expiration |

### Current McDonalds Insurance Chain

Delta | Gamma | Open Int | Expiration | Current Spread | Last Price | |||

Put | 2023-06-09 PUT at $250.0 | -0.0056 | 0.001 | 168 | 2023-06-09 | 0.0 - 0.03 | 0.03 | View |

Put | 2023-06-09 PUT at $260.0 | -0.0042 | 0.0011 | 60 | 2023-06-09 | 0.01 - 0.02 | 0.15 | View |

Put | 2023-06-09 PUT at $262.5 | -0.0057 | 0.0015 | 83 | 2023-06-09 | 0.01 - 0.03 | 0.02 | View |

Put | 2023-06-09 PUT at $265.0 | -0.0108 | 0.0026 | 113 | 2023-06-09 | 0.03 - 0.07 | 0.04 | View |

Put | 2023-06-09 PUT at $267.5 | -0.014 | 0.0036 | 34 | 2023-06-09 | 0.03 - 0.09 | 0.05 | View |

Put | 2023-06-09 PUT at $270.0 | -0.0156 | 0.0044 | 161 | 2023-06-09 | 0.04 - 0.08 | 0.05 | View |

Put | 2023-06-09 PUT at $272.5 | -0.0225 | 0.0065 | 190 | 2023-06-09 | 0.05 - 0.08 | 0.07 | View |

Put | 2023-06-09 PUT at $275.0 | -0.0308 | 0.0093 | 173 | 2023-06-09 | 0.08 - 0.1 | 0.09 | View |

Put | 2023-06-09 PUT at $277.5 | -0.044 | 0.0141 | 88 | 2023-06-09 | 0.05 - 0.15 | 0.12 | View |

Put | 2023-06-09 PUT at $280.0 | -0.0666 | 0.0224 | 995 | 2023-06-09 | 0.15 - 0.19 | 0.17 | View |

Put | 2023-06-09 PUT at $282.5 | -0.111 | 0.038 | 307 | 2023-06-09 | 0.25 - 0.3 | 0.27 | View |

## McDonalds Stock Volatility Analysis

Volatility refers to the frequency at which McDonalds stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with McDonalds' price changes. Investors will then calculate the volatility of McDonalds' 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' volatility:

### Historical Volatility

This type of stock volatility measures McDonalds' fluctuations based on previous trends. It's commonly used to predict McDonalds' 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' current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on McDonalds' to be redeemed at a future date.Transformation |

The output start index for this execution was zero with a total number of output elements of sixty-one. McDonalds Typical Price indicator is an average of each day price and can be used instead of closing price when creating different McDonalds moving average lines..

## McDonalds Projected Return Density Against Market

Considering the 90-day investment horizon McDonalds has a beta of 0.4949 . This indicates as returns on the market go up, McDonalds average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding McDonalds 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 or Hotels, Restaurants & Leisure 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' 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 0.1293, implying that it can generate a 0.13 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Predicted Return Density |

Returns |

## What Drives a McDonalds Price Volatility?

Several factors can influence a stock's market 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 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 or Hotels, Restaurants & Leisure 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' 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 is 592.38. The daily returns are distributed with a variance of 0.52 and standard deviation of 0.72. The mean deviation of McDonalds is currently at 0.53. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.94

α | Alpha over NYSE Composite | 0.13 | |

β | Beta against NYSE Composite | 0.49 | |

σ | Overall volatility | 0.72 | |

Ir | Information ratio | 0.20 |

## McDonalds Stock Return Volatility

McDonalds historical daily return volatility represents how much of McDonalds stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm has volatility of**0.7227%**on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.9312% volatility on return distribution over the 90 days horizon.

Performance (%) |

Timeline |

## About McDonalds Volatility

Volatility is a rate at which the price of McDonalds 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 may increase or decrease. In other words, similar to McDonalds's beta indicator, it measures the risk of McDonalds and helps estimate the fluctuations that may happen in a short period of time. So if prices of McDonalds 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 Reported | Projected for 2023 | ||

Market Capitalization | 193 B | 178.5 B |

McDonalds' stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on McDonalds Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much McDonalds' price varies over time.

## 3 ways to utilize McDonalds' volatility to invest better

Higher McDonalds' stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of McDonalds stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. McDonalds stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of McDonalds investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in McDonalds' stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of McDonalds' stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.

## McDonalds Investment Opportunity

NYSE Composite has a standard deviation of returns of 0.93 and is 1.29 times more volatile than McDonalds.**6**of all equities and portfolios are less risky than McDonalds. Compared to the overall equity markets, volatility of historical daily returns of McDonalds is lower than

**6 ()**of all global equities and portfolios over the last 90 days. Use McDonalds to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a somewhat bearish sentiment, but the market may correct it shortly. Check odds of McDonalds to be traded at $276.0 in 90 days.

### Poor diversification

The correlation between McDonalds and NYA is

**0.65**(i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and NYA in the same portfolio, assuming nothing else is changed.## McDonalds Additional Risk Indicators

The analysis of McDonalds' 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' investment and either accepting that risk or mitigating it. Along with some common measures of McDonalds stock's 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 Performance | 0.1603 | |||

Market Risk Adjusted Performance | 0.241 | |||

Mean Deviation | 0.5269 | |||

Semi Deviation | 0.6031 | |||

Downside Deviation | 0.7835 | |||

Coefficient Of Variation | 575.3 | |||

Standard Deviation | 0.7154 |

Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

## McDonalds 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.

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 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' 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' 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.

Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in McDonalds. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in price. For information on how to trade McDonalds Stock refer to our How to Trade McDonalds Stock guide. Note that the McDonalds information on this page should be used as a complementary analysis to other McDonalds' 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 the CEO Directory module to screen CEOs from public companies around the world.

## Complementary Tools for McDonalds Stock analysis

When running McDonalds' price analysis, check to measure McDonalds' 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 is operating at the current time. Most of McDonalds' value examination focuses on studying past and present price action to predict the probability of McDonalds' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move McDonalds' price. Additionally, you may evaluate how the addition of McDonalds to your portfolios can decrease your overall portfolio volatility.

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Is McDonalds' 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. 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 listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.

Quarterly Earnings Growth0.655 | Dividend Share5.8 | Earnings Share9.36 | Revenue Per Share31.919 | Quarterly Revenue Growth0.041 |

The market value of McDonalds 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' value that differs from its market value or its book value, called intrinsic value, which is McDonalds' 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' market value can be influenced by many factors that don't directly affect McDonalds' 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' value and its price as these two are different measures arrived at by different means. Investors typically determine if McDonalds is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, McDonalds' 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.