Correlation Between Chipotle Mexican and China Telecom
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and China Telecom 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 China Telecom 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 China Telecom, you can compare the effects of market volatilities on Chipotle Mexican and China Telecom 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 China Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and China Telecom.
Diversification Opportunities for Chipotle Mexican and China Telecom
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chipotle and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and China Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Telecom 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 China Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Telecom has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and China Telecom go up and down completely randomly.
Pair Corralation between Chipotle Mexican and China Telecom
If you would invest 4,453 in Chipotle Mexican Grill on September 2, 2024 and sell it today you would earn a total of 1,699 from holding Chipotle Mexican Grill or generate 38.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. China Telecom
Performance |
| Timeline |
| Chipotle Mexican Grill |
| China Telecom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chipotle Mexican and China Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and China Telecom
The main advantage of trading using opposite Chipotle Mexican and China Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, China Telecom 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 China Telecom will offset losses from the drop in China Telecom's long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| China Telecom vs. Meli Hotels International | China Telecom vs. BJs Restaurants | China Telecom vs. GEN Restaurant Group, | China Telecom vs. Chipotle Mexican Grill |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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