Correlation Between Chipotle Mexican and South Jersey
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and South Jersey 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 South Jersey 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 South Jersey Industries, you can compare the effects of market volatilities on Chipotle Mexican and South Jersey 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 South Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and South Jersey.
Diversification Opportunities for Chipotle Mexican and South Jersey
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chipotle and South is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and South Jersey Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Jersey Industries 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 South Jersey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Jersey Industries has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and South Jersey go up and down completely randomly.
Pair Corralation between Chipotle Mexican and South Jersey
If you would invest 5,927 in Chipotle Mexican Grill on September 12, 2024 and sell it today you would earn a total of 531.00 from holding Chipotle Mexican Grill or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. South Jersey Industries
Performance |
| Timeline |
| Chipotle Mexican Grill |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chipotle Mexican and South Jersey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and South Jersey
The main advantage of trading using opposite Chipotle Mexican and South Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, South Jersey 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 South Jersey will offset losses from the drop in South Jersey's long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| South Jersey vs. Chipotle Mexican Grill | South Jersey vs. Ark Restaurants Corp | South Jersey vs. Dominos Pizza | South Jersey vs. Palomar Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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