Correlation Between Chipotle Mexican and TOTAL

Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and TOTAL 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 TOTAL 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 TOTAL CAPITAL INTERNATIONAL, you can compare the effects of market volatilities on Chipotle Mexican and TOTAL 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 TOTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and TOTAL.

Diversification Opportunities for Chipotle Mexican and TOTAL

0.17

Correlation Coefficient

Chipotle Mexican  TOTAL

Average diversification

The 3 months correlation between Chipotle and TOTAL is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and TOTAL CAPITAL INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL CAPITAL INTERN 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 TOTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL CAPITAL INTERN has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and TOTAL go up and down completely randomly.

Pair Corralation between Chipotle Mexican and TOTAL

Considering the 90-day investment horizon Chipotle Mexican Grill is expected to generate 0.94 times more return on investment than TOTAL. However, Chipotle Mexican Grill is 1.07 times less risky than TOTAL. It trades about 0.13 of its potential returns per unit of risk. TOTAL CAPITAL INTERNATIONAL is currently generating about -0.1 per unit of risk. If you would invest  5,635  in Chipotle Mexican Grill on September 12, 2024 and sell it today you would earn a total of  923.00  from holding Chipotle Mexican Grill or generate 16.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	79.69%
Values	Daily Returns

Chipotle Mexican Grill  vs.  TOTAL CAPITAL INTERNATIONAL

Chipotle Mexican Grill

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chipotle Mexican Grill are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Chipotle Mexican reported solid returns over the last few months and may actually be approaching a breakup point.

TOTAL CAPITAL INTERN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOTAL CAPITAL INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for TOTAL CAPITAL INTERNATIONAL investors.

Pair Trading with Chipotle Mexican and TOTAL

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

The idea behind Chipotle Mexican Grill and TOTAL CAPITAL INTERNATIONAL 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.