Correlation Between NIP Group and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both NIP Group 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 NIP Group and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIP Group American and Chipotle Mexican Grill, you can compare the effects of market volatilities on NIP Group 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 NIP Group with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIP Group and Chipotle Mexican.
Diversification Opportunities for NIP Group and Chipotle Mexican
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NIP and Chipotle is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NIP Group American 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 NIP Group 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 NIP Group American 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 NIP Group i.e., NIP Group and Chipotle Mexican go up and down completely randomly.
Pair Corralation between NIP Group and Chipotle Mexican
Given the investment horizon of 90 days NIP Group American is expected to under-perform the Chipotle Mexican. In addition to that, NIP Group is 4.71 times more volatile than Chipotle Mexican Grill. It trades about -0.04 of its total potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.03 per unit of volatility. If you would invest 5,334 in Chipotle Mexican Grill on November 3, 2024 and sell it today you would earn a total of 501.00 from holding Chipotle Mexican Grill or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.82% |
| Values | Daily Returns |
NIP Group American vs. Chipotle Mexican Grill
Performance |
| Timeline |
| NIP Group American |
| Chipotle Mexican Grill |
NIP Group and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIP Group and Chipotle Mexican
The main advantage of trading using opposite NIP Group and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIP Group 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.| NIP Group vs. One Group Hospitality | NIP Group vs. Coffee Holding Co | NIP Group vs. Wabash National | NIP Group vs. BRP Inc |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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