Correlation Between Chipotle Mexican and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Kura Sushi 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 Kura Sushi 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 Kura Sushi USA, you can compare the effects of market volatilities on Chipotle Mexican and Kura Sushi 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 Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Kura Sushi.
Diversification Opportunities for Chipotle Mexican and Kura Sushi
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chipotle and Kura is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA 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 Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Kura Sushi go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Kura Sushi
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 0.44 times more return on investment than Kura Sushi. However, Chipotle Mexican Grill is 2.29 times less risky than Kura Sushi. It trades about 0.03 of its potential returns per unit of risk. Kura Sushi USA is currently generating about 0.0 per unit of risk. If you would invest 5,334 in Chipotle Mexican Grill on November 3, 2024 and sell it today you would earn a total of 501.00 from holding Chipotle Mexican Grill or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Kura Sushi USA
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Kura Sushi USA |
Chipotle Mexican and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Kura Sushi
The main advantage of trading using opposite Chipotle Mexican and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Kura Sushi 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 Kura Sushi will offset losses from the drop in Kura Sushi's long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza Common | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Kura Sushi vs. Brinker International | Kura Sushi vs. Dennys Corp | Kura Sushi vs. Bloomin Brands | Kura Sushi vs. Jack In The |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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