Correlation Between Weibo Corp and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Weibo Corp 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 Weibo Corp and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Chipotle Mexican Grill, you can compare the effects of market volatilities on Weibo Corp 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 Weibo Corp with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Chipotle Mexican.
Diversification Opportunities for Weibo Corp and Chipotle Mexican
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weibo and Chipotle is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp 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 Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Weibo Corp and Chipotle Mexican
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.51 times more return on investment than Chipotle Mexican. However, Weibo Corp is 1.51 times more volatile than Chipotle Mexican Grill. It trades about 0.05 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about 0.01 per unit of risk. If you would invest 851.00 in Weibo Corp on September 1, 2024 and sell it today you would earn a total of 109.00 from holding Weibo Corp or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Weibo Corp |
| Chipotle Mexican Grill |
Weibo Corp and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Chipotle Mexican
The main advantage of trading using opposite Weibo Corp and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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.| Weibo Corp vs. MediaAlpha | Weibo Corp vs. Asset Entities Class | Weibo Corp vs. Shutterstock | Weibo Corp vs. Match Group |
| Chipotle Mexican vs. The Wendys Co | Chipotle Mexican vs. Shake Shack | Chipotle Mexican vs. Papa Johns International | Chipotle Mexican vs. Darden Restaurants |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |