Correlation Between Chipotle Mexican and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Jollibee Foods 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 Jollibee Foods 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 Jollibee Foods Corp, you can compare the effects of market volatilities on Chipotle Mexican and Jollibee Foods 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 Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Jollibee Foods.
Diversification Opportunities for Chipotle Mexican and Jollibee Foods
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chipotle and Jollibee is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Jollibee Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jollibee Foods 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 Jollibee Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jollibee Foods Corp has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Jollibee Foods go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Jollibee Foods
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to under-perform the Jollibee Foods. But the stock apears to be less risky and, when comparing its historical volatility, Chipotle Mexican Grill is 1.74 times less risky than Jollibee Foods. The stock trades about -0.13 of its potential returns per unit of risk. The Jollibee Foods Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,631 in Jollibee Foods Corp on November 28, 2024 and sell it today you would earn a total of 152.00 from holding Jollibee Foods Corp or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Jollibee Foods Corp
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Jollibee Foods Corp |
Chipotle Mexican and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Jollibee Foods
The main advantage of trading using opposite Chipotle Mexican and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Jollibee Foods 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 Jollibee Foods will offset losses from the drop in Jollibee Foods' long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza Common | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Jollibee Foods vs. Nathans Famous | Jollibee Foods vs. Good Times Restaurants | Jollibee Foods vs. McDonalds Holdings | Jollibee Foods vs. Compass Group PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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