Correlation Between Chipotle Mexican and Bridger Aerospace
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Bridger Aerospace 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 Bridger Aerospace 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 Bridger Aerospace Group, you can compare the effects of market volatilities on Chipotle Mexican and Bridger Aerospace 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 Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Bridger Aerospace.
Diversification Opportunities for Chipotle Mexican and Bridger Aerospace
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chipotle and Bridger is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace 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 Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Bridger Aerospace go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Bridger Aerospace
Considering the 90-day investment horizon Chipotle Mexican is expected to generate 86.2 times less return on investment than Bridger Aerospace. But when comparing it to its historical volatility, Chipotle Mexican Grill is 58.26 times less risky than Bridger Aerospace. It trades about 0.07 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Bridger Aerospace Group on September 4, 2024 and sell it today you would lose (9.00) from holding Bridger Aerospace Group or give up 47.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.28% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Bridger Aerospace Group
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Bridger Aerospace |
Chipotle Mexican and Bridger Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Bridger Aerospace
The main advantage of trading using opposite Chipotle Mexican and Bridger Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Bridger Aerospace 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 Bridger Aerospace will offset losses from the drop in Bridger Aerospace's long position.| Chipotle Mexican vs. Hyatt Hotels | Chipotle Mexican vs. Smart Share Global | Chipotle Mexican vs. Sweetgreen | Chipotle Mexican vs. Wyndham Hotels Resorts |
| Bridger Aerospace vs. Vita Coco | Bridger Aerospace vs. Compania Cervecerias Unidas | Bridger Aerospace vs. Playtika Holding Corp | Bridger Aerospace vs. Emerson Radio |
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.
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