Correlation Between Chipotle Mexican and DominoS Pizza

Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and DominoS Pizza 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 Chipotle Mexican and DominoS Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chipotle Mexican Grill and DominoS Pizza Enterprises, you can compare the effects of market volatilities on Chipotle Mexican and DominoS Pizza 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 Chipotle Mexican with a short position of DominoS Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and DominoS Pizza.

Diversification Opportunities for Chipotle Mexican and DominoS Pizza

-0.72

Correlation Coefficient

Chipotle Mexican  DominoS Pizza

Pay attention - limited upside

The 3 months correlation between Chipotle and DominoS is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and DominoS Pizza Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DominoS Pizza Enterprises and Chipotle Mexican 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 Chipotle Mexican Grill are associated (or correlated) with DominoS Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DominoS Pizza Enterprises has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and DominoS Pizza go up and down completely randomly.

Pair Corralation between Chipotle Mexican and DominoS Pizza

Considering the 90-day investment horizon Chipotle Mexican Grill is expected to under-perform the DominoS Pizza. But the stock apears to be less risky and, when comparing its historical volatility, Chipotle Mexican Grill is 1.62 times less risky than DominoS Pizza. The stock trades about -0.04 of its potential returns per unit of risk. The DominoS Pizza Enterprises is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  465.00  in DominoS Pizza Enterprises on September 13, 2025 and sell it today you would earn a total of  265.00  from holding DominoS Pizza Enterprises or generate 56.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Chipotle Mexican Grill  vs.  DominoS Pizza Enterprises

Chipotle Mexican Grill

Risk-Adjusted Performance

Weakest

Over the last 90 days Chipotle Mexican Grill has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

DominoS Pizza Enterprises

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in DominoS Pizza Enterprises are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, DominoS Pizza showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chipotle Mexican and DominoS Pizza

The main advantage of trading using opposite Chipotle Mexican and DominoS Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, DominoS Pizza 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 DominoS Pizza will offset losses from the drop in DominoS Pizza's long position.

The idea behind Chipotle Mexican Grill and DominoS Pizza Enterprises pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.