Correlation Between Tim Hortons and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Tim Hortons and Chipotle Mexican 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 Tim Hortons and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tim Hortons and Chipotle Mexican Grill, you can compare the effects of market volatilities on Tim Hortons and Chipotle Mexican 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 Tim Hortons with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tim Hortons and Chipotle Mexican.
Diversification Opportunities for Tim Hortons and Chipotle Mexican
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tim and Chipotle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tim Hortons and Chipotle Mexican Grill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chipotle Mexican Grill and Tim Hortons 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 Tim Hortons are associated (or correlated) with Chipotle Mexican. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chipotle Mexican Grill has no effect on the direction of Tim Hortons i.e., Tim Hortons and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Tim Hortons and Chipotle Mexican
If you would invest (100.00) in Tim Hortons on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Tim Hortons or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Tim Hortons vs. Chipotle Mexican Grill
Performance |
Timeline |
Tim Hortons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chipotle Mexican Grill |
Tim Hortons and Chipotle Mexican Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tim Hortons and Chipotle Mexican
The main advantage of trading using opposite Tim Hortons and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tim Hortons position performs unexpectedly, Chipotle Mexican 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 Chipotle Mexican will offset losses from the drop in Chipotle Mexican's long position.Tim Hortons vs. PennantPark Investment | Tim Hortons vs. Shagrir Group Vehicle | Tim Hortons vs. Ubisoft Entertainment | Tim Hortons vs. Guangdong Investment Limited |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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