Correlation Between McDonalds and Digimarc
Can any of the company-specific risk be diversified away by investing in both McDonalds and Digimarc 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 Digimarc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McDonalds and Digimarc, you can compare the effects of market volatilities on McDonalds and Digimarc 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 Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of McDonalds and Digimarc.
Diversification Opportunities for McDonalds and Digimarc
Very good diversification
The 3 months correlation between McDonalds and Digimarc is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding McDonalds and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc 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 Digimarc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digimarc has no effect on the direction of McDonalds i.e., McDonalds and Digimarc go up and down completely randomly.
Pair Corralation between McDonalds and Digimarc
Considering the 90-day investment horizon McDonalds is expected to generate 0.25 times more return on investment than Digimarc. However, McDonalds is 4.06 times less risky than Digimarc. It trades about 0.0 of its potential returns per unit of risk. Digimarc is currently generating about -0.15 per unit of risk. If you would invest 31,208 in McDonalds on May 30, 2025 and sell it today you would lose (144.00) from holding McDonalds or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McDonalds vs. Digimarc
Performance |
| Timeline |
| McDonalds |
| Digimarc |
McDonalds and Digimarc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McDonalds and Digimarc
The main advantage of trading using opposite McDonalds and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McDonalds position performs unexpectedly, Digimarc 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 Digimarc will offset losses from the drop in Digimarc's long position.| McDonalds vs. Costco Wholesale Corp | McDonalds vs. Walt Disney | McDonalds vs. Nike Inc | McDonalds vs. Visa Class A |
| Digimarc vs. CSP Inc | Digimarc vs. Digi International | Digimarc vs. Formula Systems 1985 | Digimarc vs. Grid Dynamics Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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