Correlation Between Chipotle Mexican and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Ark Restaurants 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 Ark Restaurants 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 Ark Restaurants Corp, you can compare the effects of market volatilities on Chipotle Mexican and Ark Restaurants 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 Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Ark Restaurants.
Diversification Opportunities for Chipotle Mexican and Ark Restaurants
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chipotle and Ark is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Ark Restaurants Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ark Restaurants Corp 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 Ark Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ark Restaurants Corp has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Ark Restaurants go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Ark Restaurants
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 1.65 times more return on investment than Ark Restaurants. However, Chipotle Mexican is 1.65 times more volatile than Ark Restaurants Corp. It trades about 0.05 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.32 per unit of risk. If you would invest 6,060 in Chipotle Mexican Grill on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Chipotle Mexican Grill or generate 2.31% 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. Ark Restaurants Corp
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Ark Restaurants Corp |
Chipotle Mexican and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Ark Restaurants
The main advantage of trading using opposite Chipotle Mexican and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Ark Restaurants 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 Ark Restaurants will offset losses from the drop in Ark Restaurants' long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Ark Restaurants vs. Nathans Famous | Ark Restaurants vs. Flanigans Enterprises | Ark Restaurants vs. Good Times Restaurants | Ark Restaurants vs. Auburn National Bancorporation |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |