Correlation Between SYSTEMAIR and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR 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 SYSTEMAIR and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and Chipotle Mexican Grill, you can compare the effects of market volatilities on SYSTEMAIR 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 SYSTEMAIR with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and Chipotle Mexican.
Diversification Opportunities for SYSTEMAIR and Chipotle Mexican
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SYSTEMAIR and Chipotle is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB 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 SYSTEMAIR 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 SYSTEMAIR AB 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 SYSTEMAIR i.e., SYSTEMAIR and Chipotle Mexican go up and down completely randomly.
Pair Corralation between SYSTEMAIR and Chipotle Mexican
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 1.4 times more return on investment than Chipotle Mexican. However, SYSTEMAIR is 1.4 times more volatile than Chipotle Mexican Grill. It trades about 0.09 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.09 per unit of risk. If you would invest 442.00 in SYSTEMAIR AB on September 1, 2024 and sell it today you would earn a total of 340.00 from holding SYSTEMAIR AB or generate 76.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYSTEMAIR AB vs. Chipotle Mexican Grill
Performance |
| Timeline |
| SYSTEMAIR AB |
| Chipotle Mexican Grill |
SYSTEMAIR and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and Chipotle Mexican
The main advantage of trading using opposite SYSTEMAIR and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR 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.| SYSTEMAIR vs. CeoTronics AG | SYSTEMAIR vs. Check Point Software | SYSTEMAIR vs. Ares Management Corp | SYSTEMAIR vs. X Fab Silicon |
| Chipotle Mexican vs. Alaska Air Group | Chipotle Mexican vs. Fair Isaac Corp | Chipotle Mexican vs. Corsair Gaming | Chipotle Mexican vs. ADRIATIC METALS LS 013355 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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