Correlation Between Coffee Holding and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Coffee Holding 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 Coffee Holding and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Holding Co and Chipotle Mexican Grill, you can compare the effects of market volatilities on Coffee Holding 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 Coffee Holding with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Chipotle Mexican.
Diversification Opportunities for Coffee Holding and Chipotle Mexican
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coffee and Chipotle is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co 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 Coffee Holding 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 Coffee Holding Co 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 Coffee Holding i.e., Coffee Holding and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Coffee Holding and Chipotle Mexican
Considering the 90-day investment horizon Coffee Holding Co is expected to generate 3.38 times more return on investment than Chipotle Mexican. However, Coffee Holding is 3.38 times more volatile than Chipotle Mexican Grill. It trades about 0.13 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.06 per unit of risk. If you would invest 209.00 in Coffee Holding Co on November 2, 2024 and sell it today you would earn a total of 191.00 from holding Coffee Holding Co or generate 91.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Coffee Holding |
| Chipotle Mexican Grill |
Coffee Holding and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Chipotle Mexican
The main advantage of trading using opposite Coffee Holding and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding 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.| Coffee Holding vs. Seneca Foods Corp | Coffee Holding vs. J J Snack | Coffee Holding vs. Aryzta AG PK | Coffee Holding vs. Lifeway Foods |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |