Correlation Between Burgerfi International and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Burgerfi International 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 Burgerfi International and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burgerfi International and Chipotle Mexican Grill, you can compare the effects of market volatilities on Burgerfi International 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 Burgerfi International with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burgerfi International and Chipotle Mexican.
Diversification Opportunities for Burgerfi International and Chipotle Mexican
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Burgerfi and Chipotle is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Burgerfi International 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 Burgerfi International 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 Burgerfi International 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 Burgerfi International i.e., Burgerfi International and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Burgerfi International and Chipotle Mexican
If you would invest 5,734 in Chipotle Mexican Grill on August 28, 2024 and sell it today you would earn a total of 537.00 from holding Chipotle Mexican Grill or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 2.33% |
| Values | Daily Returns |
Burgerfi International vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Burgerfi International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chipotle Mexican Grill |
Burgerfi International and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burgerfi International and Chipotle Mexican
The main advantage of trading using opposite Burgerfi International and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burgerfi International 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.| Burgerfi International vs. FAT Brands | Burgerfi International vs. FAT Brands | Burgerfi International vs. Brinker International | Burgerfi International vs. Jack In The |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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