Correlation Between Chipotle Mexican and Papa Johns
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Papa Johns 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 Papa Johns 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 Papa Johns International, you can compare the effects of market volatilities on Chipotle Mexican and Papa Johns 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 Papa Johns. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Papa Johns.
Diversification Opportunities for Chipotle Mexican and Papa Johns
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chipotle and Papa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Papa Johns International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papa Johns International 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 Papa Johns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papa Johns International has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Papa Johns go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Papa Johns
If you would invest 0.00 in Chipotle Mexican Grill on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Chipotle Mexican Grill or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.28% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Papa Johns International
Performance |
| Timeline |
| Chipotle Mexican Grill |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Papa Johns International |
Chipotle Mexican and Papa Johns Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Papa Johns
The main advantage of trading using opposite Chipotle Mexican and Papa Johns positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Papa Johns 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 Papa Johns will offset losses from the drop in Papa Johns' long position.| Chipotle Mexican vs. Arrow Electronics | Chipotle Mexican vs. Commercial Vehicle Group | Chipotle Mexican vs. STORE ELECTRONIC | Chipotle Mexican vs. LG Electronics |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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