Correlation Between FrontView REIT, and McDonalds Holdings

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

By analyzing existing cross correlation between FrontView REIT, and McDonalds Holdings, you can compare the effects of market volatilities on FrontView REIT, and McDonalds Holdings 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 FrontView REIT, with a short position of McDonalds Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and McDonalds Holdings.

Diversification Opportunities for FrontView REIT, and McDonalds Holdings

0.11

Correlation Coefficient

FrontView REIT,  McDonalds Holdings

Average diversification

The 3 months correlation between FrontView and McDonalds is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and McDonalds Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds Holdings and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with McDonalds Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds Holdings has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and McDonalds Holdings go up and down completely randomly.

Pair Corralation between FrontView REIT, and McDonalds Holdings

Considering the 90-day investment horizon FrontView REIT, is expected to generate 1.03 times more return on investment than McDonalds Holdings. However, FrontView REIT, is 1.03 times more volatile than McDonalds Holdings. It trades about 0.05 of its potential returns per unit of risk. McDonalds Holdings is currently generating about -0.13 per unit of risk. If you would invest  1,900  in FrontView REIT, on September 14, 2024 and sell it today you would earn a total of  60.00  from holding FrontView REIT, or generate 3.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	82.54%
Values	Daily Returns

FrontView REIT,  vs.  McDonalds Holdings

FrontView REIT,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FrontView REIT, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

McDonalds Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days McDonalds Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with FrontView REIT, and McDonalds Holdings

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

The idea behind FrontView REIT, and McDonalds Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.