Correlation Between GreenTree Hospitality and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality 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 GreenTree Hospitality and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenTree Hospitality Group and Chipotle Mexican Grill, you can compare the effects of market volatilities on GreenTree Hospitality 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 GreenTree Hospitality with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and Chipotle Mexican.
Diversification Opportunities for GreenTree Hospitality and Chipotle Mexican
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GreenTree and Chipotle is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group 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 GreenTree Hospitality 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 GreenTree Hospitality Group 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 GreenTree Hospitality i.e., GreenTree Hospitality and Chipotle Mexican go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and Chipotle Mexican
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the Chipotle Mexican. In addition to that, GreenTree Hospitality is 1.34 times more volatile than Chipotle Mexican Grill. It trades about -0.03 of its total potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.26 per unit of volatility. If you would invest 5,881 in Chipotle Mexican Grill on September 18, 2024 and sell it today you would earn a total of 548.00 from holding Chipotle Mexican Grill or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTree Hospitality Group vs. Chipotle Mexican Grill
Performance |
| Timeline |
| GreenTree Hospitality |
| Chipotle Mexican Grill |
GreenTree Hospitality and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTree Hospitality and Chipotle Mexican
The main advantage of trading using opposite GreenTree Hospitality and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality 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.| GreenTree Hospitality vs. Tuniu Corp | GreenTree Hospitality vs. TripAdvisor | GreenTree Hospitality vs. Thayer Ventures Acquisition |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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