Correlation Between Chipotle Mexican and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises, you can compare the effects of market volatilities on Chipotle Mexican and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Apogee Enterprises.
Diversification Opportunities for Chipotle Mexican and Apogee Enterprises
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chipotle and Apogee is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Apogee Enterprises
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 0.9 times more return on investment than Apogee Enterprises. However, Chipotle Mexican Grill is 1.11 times less risky than Apogee Enterprises. It trades about 0.34 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.23 per unit of risk. If you would invest 5,638 in Chipotle Mexican Grill on September 5, 2024 and sell it today you would earn a total of 751.00 from holding Chipotle Mexican Grill or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Apogee Enterprises
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Apogee Enterprises |
Chipotle Mexican and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Apogee Enterprises
The main advantage of trading using opposite Chipotle Mexican and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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