Correlation Between Procter Gamble and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Procter Gamble and Chipotle Mexican Grill, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Chipotle Mexican.
Diversification Opportunities for Procter Gamble and Chipotle Mexican
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Procter and Chipotle is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Procter Gamble 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 Procter Gamble 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 The Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Procter Gamble and Chipotle Mexican
Assuming the 90 days trading horizon The Procter Gamble is expected to generate 0.4 times more return on investment than Chipotle Mexican. However, The Procter Gamble is 2.52 times less risky than Chipotle Mexican. It trades about 0.28 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.08 per unit of risk. If you would invest 6,909 in The Procter Gamble on August 28, 2024 and sell it today you would earn a total of 462.00 from holding The Procter Gamble or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
The Procter Gamble vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Procter Gamble |
| Chipotle Mexican Grill |
Procter Gamble and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Chipotle Mexican
The main advantage of trading using opposite Procter Gamble and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Unilever PLC | Procter Gamble vs. Colgate Palmolive | Procter Gamble vs. Bombril SA | Procter Gamble vs. Mundial SA |
| Chipotle Mexican vs. Taiwan Semiconductor Manufacturing | Chipotle Mexican vs. Fras le SA | Chipotle Mexican vs. Clave Indices De | Chipotle Mexican vs. BTG Pactual Logstica |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |