Correlation Between Kura Sushi and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Kura Sushi 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 Kura Sushi and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Sushi USA and Chipotle Mexican Grill, you can compare the effects of market volatilities on Kura Sushi 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 Kura Sushi with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and Chipotle Mexican.
Diversification Opportunities for Kura Sushi and Chipotle Mexican
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kura and Chipotle is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA 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 Kura Sushi 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 Kura Sushi USA 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 Kura Sushi i.e., Kura Sushi and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Kura Sushi and Chipotle Mexican
Given the investment horizon of 90 days Kura Sushi is expected to generate 1.29 times less return on investment than Chipotle Mexican. In addition to that, Kura Sushi is 1.64 times more volatile than Chipotle Mexican Grill. It trades about 0.05 of its total potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.1 per unit of volatility. If you would invest 5,902 in Chipotle Mexican Grill on August 24, 2024 and sell it today you would earn a total of 299.00 from holding Chipotle Mexican Grill or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Sushi USA vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Kura Sushi USA |
| Chipotle Mexican Grill |
Kura Sushi and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Sushi and Chipotle Mexican
The main advantage of trading using opposite Kura Sushi and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi 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.| Kura Sushi vs. Chipotle Mexican Grill | Kura Sushi vs. Eshallgo Class A | Kura Sushi vs. Amtech Systems | Kura Sushi vs. Gold Fields Ltd |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |