Which will perform better? $MCD vs $SBUX #SPREAD #PAIROPTIONS

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Pair Options Forecast: SBUX             will outperform MCD             in the next 2 trading day
ANALYSIS: Cointegration, Correlation and Technical
Strategy: Elliot Wave Principle

Trading pairs MCD             vs SBUX             which has moved from its correlation can be done based on cointegration or technical analyzing the prices of the stock pairs and tries to profit from the mean-reversion proces.

Cointegration (right chart): look for the divergence pairs that have moved away from each other and then back together in a regular pattern.

Technical Analysis:
McDonald"s move together very closely and has a maximal correlation with Starbucks             . This means it's profitable when the relative value between the two assets is perturbed from equilibrium, you can take a contrarian position and profit from the spread trading as the prices revert back to their long-run mean.

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