Correlation Between Chipotle Mexican and Lottery, Common
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Lottery, Common 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 Lottery, Common 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 Lottery, Common Stock, you can compare the effects of market volatilities on Chipotle Mexican and Lottery, Common 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 Lottery, Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Lottery, Common.
Diversification Opportunities for Chipotle Mexican and Lottery, Common
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chipotle and Lottery, is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Lottery, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lottery, Common Stock 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 Lottery, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lottery, Common Stock has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Lottery, Common go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Lottery, Common
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 0.26 times more return on investment than Lottery, Common. However, Chipotle Mexican Grill is 3.86 times less risky than Lottery, Common. It trades about 0.25 of its potential returns per unit of risk. Lottery, Common Stock is currently generating about 0.0 per unit of risk. If you would invest 5,577 in Chipotle Mexican Grill on September 1, 2024 and sell it today you would earn a total of 575.00 from holding Chipotle Mexican Grill or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Lottery, Common Stock
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Lottery, Common Stock |
Chipotle Mexican and Lottery, Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Lottery, Common
The main advantage of trading using opposite Chipotle Mexican and Lottery, Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Lottery, Common 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 Lottery, Common will offset losses from the drop in Lottery, Common'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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