Correlation Between ENTREPARTICULIERS and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both ENTREPARTICULIERS 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 ENTREPARTICULIERS and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENTREPARTICULIERS EO 10 and Chipotle Mexican Grill, you can compare the effects of market volatilities on ENTREPARTICULIERS 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 ENTREPARTICULIERS with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTREPARTICULIERS and Chipotle Mexican.
Diversification Opportunities for ENTREPARTICULIERS and Chipotle Mexican
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ENTREPARTICULIERS and Chipotle is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ENTREPARTICULIERS EO 10 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 ENTREPARTICULIERS 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 ENTREPARTICULIERS EO 10 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 ENTREPARTICULIERS i.e., ENTREPARTICULIERS and Chipotle Mexican go up and down completely randomly.
Pair Corralation between ENTREPARTICULIERS and Chipotle Mexican
Assuming the 90 days horizon ENTREPARTICULIERS EO 10 is expected to under-perform the Chipotle Mexican. In addition to that, ENTREPARTICULIERS is 2.13 times more volatile than Chipotle Mexican Grill. It trades about -0.12 of its total potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.17 per unit of volatility. If you would invest 242,650 in Chipotle Mexican Grill on February 27, 2024 and sell it today you would earn a total of 51,350 from holding Chipotle Mexican Grill or generate 21.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ENTREPARTICULIERS EO 10 vs. Chipotle Mexican Grill
Performance |
Timeline |
ENTREPARTICULIERS EO |
Chipotle Mexican Grill |
ENTREPARTICULIERS and Chipotle Mexican Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ENTREPARTICULIERS and Chipotle Mexican
The main advantage of trading using opposite ENTREPARTICULIERS and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTREPARTICULIERS 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.ENTREPARTICULIERS vs. AIRBNB INC DL 01 | ENTREPARTICULIERS vs. CITIUS RESOURCES LS 005 | ENTREPARTICULIERS vs. SIVERS SEMICONDUCTORS AB | ENTREPARTICULIERS vs. Norsk Hydro ASA |
Chipotle Mexican vs. CITIUS RESOURCES LS 005 | Chipotle Mexican vs. SIVERS SEMICONDUCTORS AB | Chipotle Mexican vs. Norsk Hydro ASA | Chipotle Mexican vs. SYNNEX |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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