Correlation Between Jack In and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Jack In 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 Jack In and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jack In The and Chipotle Mexican Grill, you can compare the effects of market volatilities on Jack In 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 Jack In with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack In and Chipotle Mexican.
Diversification Opportunities for Jack In and Chipotle Mexican
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jack and Chipotle is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jack In The 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 Jack In 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 Jack In The 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 Jack In i.e., Jack In and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Jack In and Chipotle Mexican
Given the investment horizon of 90 days Jack In The is expected to under-perform the Chipotle Mexican. But the stock apears to be less risky and, when comparing its historical volatility, Jack In The is 1.05 times less risky than Chipotle Mexican. The stock trades about -0.09 of its potential returns per unit of risk. The Chipotle Mexican Grill is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,060 in Chipotle Mexican Grill on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Chipotle Mexican Grill or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack In The vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Jack In |
| Chipotle Mexican Grill |
Jack In and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack In and Chipotle Mexican
The main advantage of trading using opposite Jack In and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack In 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.| Jack In vs. Dine Brands Global | Jack In vs. Bloomin Brands | Jack In vs. BJs Restaurants | Jack In vs. The Cheesecake Factory |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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