Correlation Between Chipotle Mexican and Wingstop
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Wingstop 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 Wingstop 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 Wingstop, you can compare the effects of market volatilities on Chipotle Mexican and Wingstop 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 Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Wingstop.
Diversification Opportunities for Chipotle Mexican and Wingstop
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chipotle and Wingstop is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop 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 Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Wingstop go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Wingstop
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 0.48 times more return on investment than Wingstop. However, Chipotle Mexican Grill is 2.08 times less risky than Wingstop. It trades about 0.04 of its potential returns per unit of risk. Wingstop is currently generating about -0.04 per unit of risk. If you would invest 5,902 in Chipotle Mexican Grill on August 24, 2024 and sell it today you would earn a total of 96.00 from holding Chipotle Mexican Grill or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chipotle Mexican Grill vs. Wingstop
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Wingstop |
Chipotle Mexican and Wingstop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Wingstop
The main advantage of trading using opposite Chipotle Mexican and Wingstop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Wingstop 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 Wingstop will offset losses from the drop in Wingstop's long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |