MCD vs PEP: Correlation
How closely do McDonald's (MCD) and PepsiCo (PEP) trade together? Their weekly returns over three years give a correlation of 0.42, which is moderate.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are MCD and PEP?
Across a 3-year window, the weekly returns of MCD and PEP correlate at 0.42, moderate. The link has tightened recently: the 1-year correlation (0.58) runs above the 3-year figure (0.42). Stretching to 5 years gives 0.53, with an annualized covariance of 143.9 %².
Within MCD's tracked universe of 34 assets, PEP comes in at #12 by 3-year correlation. On 12-month performance PEP holds a 12.9-point edge, -14.5% against -1.6%. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.13 to 0.70.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
MCD vs PEP: side by side
| MCD (McDonald's) | PEP (PepsiCo) | |
|---|---|---|
| 1-year return | -14.5% | -1.6% |
| 5-year return | +23.3% | +4.9% |
| Volatility (ann.) | 17.8% | 19.1% |
| Beta vs S&P 500 | 0.30 | 0.13 |
| Max drawdown (3Y) | -22.8% | -27.5% |
| Market cap | $184.0B | $190.9B |
| P/E (trailing) | 21.7 | 18.6 |
| Dividend yield | 2.75% | 4.04% |
| Sector / category | Consumer Discretionary | Consumer Staples |
Year-by-year returns
| Year | MCD | PEP |
|---|---|---|
| 2022 | +0.5% | +6.8% |
| 2023 | +15.1% | -3.3% |
| 2024 | +0.1% | -7.6% |
| 2025 | +7.9% | -1.8% |
| 2026 | -13.9% | -0.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are MCD and PEP good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.42 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between MCD and PEP?
The MCD/PEP correlation stands at 0.42 on a 3-year window (1 year: 0.58, 5 years: 0.53), computed from weekly returns as of 2026-08-27.
Is PEP a good diversifier for MCD?
Yes, to a useful degree: a correlation of 0.42 leaves real independence between the two, which historically damped combined volatility.
What does a correlation of 0.42 mean?
A reading of 0.42 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/mcd-vs-pep.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/mcd-vs-pep/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: MCD correlations · PEP correlations
