Correlation Between Chipotle Mexican and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Collins Foods 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 Collins Foods 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 Collins Foods Limited, you can compare the effects of market volatilities on Chipotle Mexican and Collins Foods 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 Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Collins Foods.
Diversification Opportunities for Chipotle Mexican and Collins Foods
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chipotle and Collins is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Collins Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods Limited 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods Limited has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Collins Foods go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Collins Foods
Assuming the 90 days horizon Chipotle Mexican Grill is expected to under-perform the Collins Foods. In addition to that, Chipotle Mexican is 1.2 times more volatile than Collins Foods Limited. It trades about -0.06 of its total potential returns per unit of risk. Collins Foods Limited is currently generating about 0.01 per unit of volatility. If you would invest 440.00 in Collins Foods Limited on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Collins Foods Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Collins Foods Limited
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Collins Foods Limited |
Chipotle Mexican and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Collins Foods
The main advantage of trading using opposite Chipotle Mexican and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Chipotle Mexican vs. AEGEAN AIRLINES | Chipotle Mexican vs. American Airlines Group | Chipotle Mexican vs. China Eastern Airlines | Chipotle Mexican vs. Gol Intelligent Airlines |
| Collins Foods vs. Nishi Nippon Railroad Co | Collins Foods vs. SAFEROADS HLDGS | Collins Foods vs. LAir Liquide SA | Collins Foods vs. Gold Road Resources |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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