Correlation Between GMxico Transportes and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes 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 GMxico Transportes and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Chipotle Mexican Grill, you can compare the effects of market volatilities on GMxico Transportes 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 GMxico Transportes with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Chipotle Mexican.
Diversification Opportunities for GMxico Transportes and Chipotle Mexican
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GMxico and Chipotle is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB 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 GMxico Transportes 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 GMxico Transportes SAB 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 GMxico Transportes i.e., GMxico Transportes and Chipotle Mexican go up and down completely randomly.
Pair Corralation between GMxico Transportes and Chipotle Mexican
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to generate 0.24 times more return on investment than Chipotle Mexican. However, GMxico Transportes SAB is 4.19 times less risky than Chipotle Mexican. It trades about -0.02 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about -0.02 per unit of risk. If you would invest 3,494 in GMxico Transportes SAB on September 2, 2024 and sell it today you would lose (401.00) from holding GMxico Transportes SAB or give up 11.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Chipotle Mexican Grill
Performance |
| Timeline |
| GMxico Transportes SAB |
| Chipotle Mexican Grill |
GMxico Transportes and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Chipotle Mexican
The main advantage of trading using opposite GMxico Transportes and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes 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.| GMxico Transportes vs. Grupo Sports World | GMxico Transportes vs. Monster Beverage Corp | GMxico Transportes vs. Deutsche Bank Aktiengesellschaft | GMxico Transportes vs. United States Steel |
| Chipotle Mexican vs. GMxico Transportes SAB | Chipotle Mexican vs. Southwest Airlines | Chipotle Mexican vs. United Airlines Holdings | Chipotle Mexican vs. Verizon Communications |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets |