Correlation Between Chipotle Mexican and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Allegheny Technologies 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 Allegheny Technologies 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 Allegheny Technologies Incorporated, you can compare the effects of market volatilities on Chipotle Mexican and Allegheny Technologies 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 Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Allegheny Technologies.
Diversification Opportunities for Chipotle Mexican and Allegheny Technologies
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chipotle and Allegheny is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies 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 Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Allegheny Technologies go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Allegheny Technologies
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 0.75 times more return on investment than Allegheny Technologies. However, Chipotle Mexican Grill is 1.33 times less risky than Allegheny Technologies. It trades about 0.07 of its potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about 0.04 per unit of risk. If you would invest 3,066 in Chipotle Mexican Grill on November 27, 2024 and sell it today you would earn a total of 2,055 from holding Chipotle Mexican Grill or generate 67.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Allegheny Technologies |
Chipotle Mexican and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Allegheny Technologies
The main advantage of trading using opposite Chipotle Mexican and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Allegheny Technologies 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza Common | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |