Correlation Between Chipotle Mexican and Contagious Gaming
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Contagious Gaming 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 Contagious Gaming 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 Contagious Gaming, you can compare the effects of market volatilities on Chipotle Mexican and Contagious Gaming 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 Contagious Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Contagious Gaming.
Diversification Opportunities for Chipotle Mexican and Contagious Gaming
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chipotle and Contagious is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Contagious Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contagious Gaming 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 Contagious Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contagious Gaming has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Contagious Gaming go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Contagious Gaming
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 0.56 times more return on investment than Contagious Gaming. However, Chipotle Mexican Grill is 1.77 times less risky than Contagious Gaming. It trades about 0.04 of its potential returns per unit of risk. Contagious Gaming is currently generating about -0.07 per unit of risk. If you would invest 5,423 in Chipotle Mexican Grill on September 1, 2024 and sell it today you would earn a total of 729.00 from holding Chipotle Mexican Grill or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Contagious Gaming
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Contagious Gaming |
Chipotle Mexican and Contagious Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Contagious Gaming
The main advantage of trading using opposite Chipotle Mexican and Contagious Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Contagious Gaming 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 Contagious Gaming will offset losses from the drop in Contagious Gaming's long position.| Chipotle Mexican vs. The Wendys Co | Chipotle Mexican vs. Shake Shack | Chipotle Mexican vs. Papa Johns International | Chipotle Mexican vs. Darden Restaurants |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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