Correlation Between Smart Share and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Smart Share and Chipotle Mexican 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 Smart Share and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart Share Global and Chipotle Mexican Grill, you can compare the effects of market volatilities on Smart Share and Chipotle Mexican 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 Smart Share with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Share and Chipotle Mexican.
Diversification Opportunities for Smart Share and Chipotle Mexican
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smart and Chipotle is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Smart Share Global and Chipotle Mexican Grill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chipotle Mexican Grill and Smart Share 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 Smart Share Global are associated (or correlated) with Chipotle Mexican. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chipotle Mexican Grill has no effect on the direction of Smart Share i.e., Smart Share and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Smart Share and Chipotle Mexican
Allowing for the 90-day total investment horizon Smart Share Global is expected to generate 4.34 times more return on investment than Chipotle Mexican. However, Smart Share is 4.34 times more volatile than Chipotle Mexican Grill. It trades about 0.2 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about -0.12 per unit of risk. If you would invest 69.00 in Smart Share Global on October 23, 2024 and sell it today you would earn a total of 38.00 from holding Smart Share Global or generate 55.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smart Share Global vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Smart Share Global |
| Chipotle Mexican Grill |
Smart Share and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart Share and Chipotle Mexican
The main advantage of trading using opposite Smart Share and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Share position performs unexpectedly, Chipotle Mexican 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 Chipotle Mexican will offset losses from the drop in Chipotle Mexican's long position.| Smart Share vs. Chipotle Mexican Grill | Smart Share vs. Yum Brands | Smart Share vs. The Wendys Co | Smart Share vs. Wingstop |
| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza Common | 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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