Correlation Between Chipotle Mexican and ATMA Participaes
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and ATMA Participaes 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 Chipotle Mexican and ATMA Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chipotle Mexican Grill and ATMA Participaes SA, you can compare the effects of market volatilities on Chipotle Mexican and ATMA Participaes 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 Chipotle Mexican with a short position of ATMA Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and ATMA Participaes.
Diversification Opportunities for Chipotle Mexican and ATMA Participaes
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chipotle and ATMA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes and Chipotle Mexican 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 Chipotle Mexican Grill are associated (or correlated) with ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and ATMA Participaes go up and down completely randomly.
Pair Corralation between Chipotle Mexican and ATMA Participaes
Assuming the 90 days trading horizon Chipotle Mexican Grill is expected to generate 1.37 times more return on investment than ATMA Participaes. However, Chipotle Mexican is 1.37 times more volatile than ATMA Participaes SA. It trades about 0.08 of its potential returns per unit of risk. ATMA Participaes SA is currently generating about -0.13 per unit of risk. If you would invest 1,730 in Chipotle Mexican Grill on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Chipotle Mexican Grill or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. ATMA Participaes SA
Performance |
| Timeline |
| Chipotle Mexican Grill |
| ATMA Participaes |
Chipotle Mexican and ATMA Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and ATMA Participaes
The main advantage of trading using opposite Chipotle Mexican and ATMA Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, ATMA Participaes 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 ATMA Participaes will offset losses from the drop in ATMA Participaes' long position.| Chipotle Mexican vs. Taiwan Semiconductor Manufacturing | Chipotle Mexican vs. Fras le SA | Chipotle Mexican vs. Clave Indices De | Chipotle Mexican vs. BTG Pactual Logstica |
| ATMA Participaes vs. Mliuz SA | ATMA Participaes vs. Lojas Quero Quero SA | ATMA Participaes vs. Grupo SBF SA | ATMA Participaes vs. Enjoei SA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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