Correlation Between Big Buck and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Big Buck 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 Big Buck and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Buck Brewery and Chipotle Mexican Grill, you can compare the effects of market volatilities on Big Buck 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 Big Buck with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Buck and Chipotle Mexican.
Diversification Opportunities for Big Buck and Chipotle Mexican
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Big and Chipotle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Big Buck Brewery 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 Big Buck 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 Big Buck Brewery 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 Big Buck i.e., Big Buck and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Big Buck and Chipotle Mexican
If you would invest 231,177 in Chipotle Mexican Grill on January 25, 2024 and sell it today you would earn a total of 60,323 from holding Chipotle Mexican Grill or generate 26.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Big Buck Brewery vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Big Buck Brewery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chipotle Mexican Grill |
Big Buck and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Buck and Chipotle Mexican
The main advantage of trading using opposite Big Buck and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Buck 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.| Big Buck vs. Maiden Holdings | Big Buck vs. Tencent Music Entertainment | Big Buck vs. Employers Holdings | Big Buck vs. Sun Life Financial |
| Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co | Chipotle Mexican vs. Wingstop |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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