Correlation Between BOS Better and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both BOS Better 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 BOS Better and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOS Better Online and Chipotle Mexican Grill, you can compare the effects of market volatilities on BOS Better 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 BOS Better with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and Chipotle Mexican.
Diversification Opportunities for BOS Better and Chipotle Mexican
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOS and Chipotle is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online 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 BOS Better 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 BOS Better Online 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 BOS Better i.e., BOS Better and Chipotle Mexican go up and down completely randomly.
Pair Corralation between BOS Better and Chipotle Mexican
Given the investment horizon of 90 days BOS Better is expected to generate 1.33 times less return on investment than Chipotle Mexican. But when comparing it to its historical volatility, BOS Better Online is 1.02 times less risky than Chipotle Mexican. It trades about 0.06 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,473 in Chipotle Mexican Grill on September 3, 2024 and sell it today you would earn a total of 1,679 from holding Chipotle Mexican Grill or generate 37.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOS Better Online vs. Chipotle Mexican Grill
Performance |
| Timeline |
| BOS Better Online |
| Chipotle Mexican Grill |
BOS Better and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and Chipotle Mexican
The main advantage of trading using opposite BOS Better and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better 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.| BOS Better vs. Highway Holdings Limited | BOS Better vs. QCR Holdings | BOS Better vs. Partner Communications | BOS Better vs. Acumen Pharmaceuticals |
| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Highway Holdings Limited | Chipotle Mexican vs. QCR Holdings | Chipotle Mexican vs. Partner Communications |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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