Correlation Between Chipotle Mexican and Parker Hannifin
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Parker Hannifin 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 Parker Hannifin 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 Parker Hannifin, you can compare the effects of market volatilities on Chipotle Mexican and Parker Hannifin 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 Parker Hannifin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Parker Hannifin.
Diversification Opportunities for Chipotle Mexican and Parker Hannifin
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chipotle and Parker is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Parker Hannifin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker Hannifin 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 Parker Hannifin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parker Hannifin has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Parker Hannifin go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Parker Hannifin
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 2.03 times more return on investment than Parker Hannifin. However, Chipotle Mexican is 2.03 times more volatile than Parker Hannifin. It trades about 0.23 of its potential returns per unit of risk. Parker Hannifin is currently generating about -0.1 per unit of risk. If you would invest 6,049 in Chipotle Mexican Grill on September 13, 2024 and sell it today you would earn a total of 508.00 from holding Chipotle Mexican Grill or generate 8.4% 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. Parker Hannifin
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Parker Hannifin |
Chipotle Mexican and Parker Hannifin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Parker Hannifin
The main advantage of trading using opposite Chipotle Mexican and Parker Hannifin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Parker Hannifin 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 Parker Hannifin will offset losses from the drop in Parker Hannifin's long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |