Correlation Between Chipotle Mexican and Ruths Hospitality
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Ruths Hospitality 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 Ruths Hospitality 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 Ruths Hospitality Group, you can compare the effects of market volatilities on Chipotle Mexican and Ruths Hospitality 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 Ruths Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Ruths Hospitality.
Diversification Opportunities for Chipotle Mexican and Ruths Hospitality
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chipotle and Ruths is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Ruths Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruths Hospitality 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 Ruths Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruths Hospitality has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Ruths Hospitality go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Ruths Hospitality
If you would invest 5,762 in Chipotle Mexican Grill on August 31, 2024 and sell it today you would earn a total of 443.00 from holding Chipotle Mexican Grill or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.27% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Ruths Hospitality Group
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Ruths Hospitality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chipotle Mexican and Ruths Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Ruths Hospitality
The main advantage of trading using opposite Chipotle Mexican and Ruths Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Ruths Hospitality 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 Ruths Hospitality will offset losses from the drop in Ruths Hospitality's long position.| Chipotle Mexican vs. Wingstop | Chipotle Mexican vs. RLJ Lodging Trust | Chipotle Mexican vs. Aquagold International | Chipotle Mexican vs. Stepstone Group |
| Ruths Hospitality vs. Dine Brands Global | Ruths Hospitality vs. Bloomin Brands | Ruths Hospitality vs. BJs Restaurants | Ruths Hospitality vs. The Cheesecake Factory |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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