McGregor has not fought since losing his lightweight title fight with Khabib Nurmagomedov in October 2018 but has made clear his plans to return to the sport in 2020.
He has twice fought Diaz: losing their first contest in March 2016 before gaining revenge in a five-round classic a few months later.
“I think Diaz beats him,” McGregor told MMA Fighting.
“He’s got crisper boxing, way more experience. I think Masvidal’s had a good run, he’s had a two fight win streak.
“The game is very forgetful I believe, our sport is, I think Diaz has enough in him to do it.
“I think he’s in a better space. You’ve got to factor that in, what kind of space is the fighter in because everyone’s the best on their day. I think Diaz beats him.”