Correlation Between Chipotle Mexican and TWFG,
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and TWFG, 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 TWFG, 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 TWFG, Class A, you can compare the effects of market volatilities on Chipotle Mexican and TWFG, 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 TWFG,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and TWFG,.
Diversification Opportunities for Chipotle Mexican and TWFG,
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chipotle and TWFG, is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A 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 TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and TWFG, go up and down completely randomly.
Pair Corralation between Chipotle Mexican and TWFG,
Considering the 90-day investment horizon Chipotle Mexican is expected to generate 2.78 times less return on investment than TWFG,. But when comparing it to its historical volatility, Chipotle Mexican Grill is 1.55 times less risky than TWFG,. It trades about 0.08 of its potential returns per unit of risk. TWFG, Class A is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,201 in TWFG, Class A on September 12, 2024 and sell it today you would earn a total of 940.00 from holding TWFG, Class A or generate 42.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 28.98% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. TWFG, Class A
Performance |
| Timeline |
| Chipotle Mexican Grill |
| TWFG, Class A |
Chipotle Mexican and TWFG, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and TWFG,
The main advantage of trading using opposite Chipotle Mexican and TWFG, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, TWFG, 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 TWFG, will offset losses from the drop in TWFG,'s long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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