Correlation Between Chipotle Mexican and INTER CARS
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and INTER CARS 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 INTER CARS 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 INTER CARS SA, you can compare the effects of market volatilities on Chipotle Mexican and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and INTER CARS.
Diversification Opportunities for Chipotle Mexican and INTER CARS
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chipotle and INTER is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and INTER CARS go up and down completely randomly.
Pair Corralation between Chipotle Mexican and INTER CARS
Assuming the 90 days horizon Chipotle Mexican Grill is expected to generate 1.12 times more return on investment than INTER CARS. However, Chipotle Mexican is 1.12 times more volatile than INTER CARS SA. It trades about 0.27 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.25 per unit of risk. If you would invest 5,259 in Chipotle Mexican Grill on September 1, 2024 and sell it today you would earn a total of 652.00 from holding Chipotle Mexican Grill or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. INTER CARS SA
Performance |
| Timeline |
| Chipotle Mexican Grill |
| INTER CARS SA |
Chipotle Mexican and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and INTER CARS
The main advantage of trading using opposite Chipotle Mexican and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| Chipotle Mexican vs. Alaska Air Group | Chipotle Mexican vs. Fair Isaac Corp | Chipotle Mexican vs. Corsair Gaming | Chipotle Mexican vs. ADRIATIC METALS LS 013355 |
| INTER CARS vs. Commercial Vehicle Group | INTER CARS vs. Zijin Mining Group | INTER CARS vs. GEELY AUTOMOBILE | INTER CARS vs. Grupo Carso SAB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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