Correlation Between Simon Property and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Simon Property 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 Simon Property and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simon Property Group and Chipotle Mexican Grill, you can compare the effects of market volatilities on Simon Property 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 Simon Property with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Chipotle Mexican.
Diversification Opportunities for Simon Property and Chipotle Mexican
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and Chipotle is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group 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 Simon Property 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 Simon Property Group 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 Simon Property i.e., Simon Property and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Simon Property and Chipotle Mexican
Considering the 90-day investment horizon Simon Property is expected to generate 1.26 times less return on investment than Chipotle Mexican. But when comparing it to its historical volatility, Simon Property Group is 1.21 times less risky than Chipotle Mexican. It trades about 0.08 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,141 in Chipotle Mexican Grill on August 24, 2024 and sell it today you would earn a total of 3,060 from holding Chipotle Mexican Grill or generate 97.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Simon Property Group |
| Chipotle Mexican Grill |
Simon Property and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Chipotle Mexican
The main advantage of trading using opposite Simon Property and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property 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.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. Tanger Factory Outlet | Simon Property vs. Netstreit Corp |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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