Correlation Between INTER CARS and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both INTER CARS 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 INTER CARS and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and Chipotle Mexican Grill, you can compare the effects of market volatilities on INTER CARS 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 INTER CARS with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Chipotle Mexican.
Diversification Opportunities for INTER CARS and Chipotle Mexican
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTER and Chipotle is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA 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 INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and Chipotle Mexican go up and down completely randomly.
Pair Corralation between INTER CARS and Chipotle Mexican
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.26 times more return on investment than Chipotle Mexican. However, INTER CARS is 1.26 times more volatile than Chipotle Mexican Grill. It trades about 0.12 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about -0.2 per unit of risk. If you would invest 13,160 in INTER CARS SA on November 27, 2024 and sell it today you would earn a total of 740.00 from holding INTER CARS SA or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. Chipotle Mexican Grill
Performance |
| Timeline |
| INTER CARS SA |
| Chipotle Mexican Grill |
INTER CARS and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Chipotle Mexican
The main advantage of trading using opposite INTER CARS and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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.| INTER CARS vs. PATTIES FOODS | INTER CARS vs. China Southern Airlines | INTER CARS vs. SINGAPORE AIRLINES | INTER CARS vs. Singapore Airlines 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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