Correlation Between Chipotle Mexican and Veea

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

Diversification Opportunities for Chipotle Mexican and Veea

-0.44

Correlation Coefficient

Chipotle Mexican  Veea

Very good diversification

The 3 months correlation between Chipotle and Veea is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc 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 Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Veea go up and down completely randomly.

Pair Corralation between Chipotle Mexican and Veea

Considering the 90-day investment horizon Chipotle Mexican is expected to generate 64.41 times less return on investment than Veea. But when comparing it to its historical volatility, Chipotle Mexican Grill is 3.97 times less risky than Veea. It trades about 0.02 of its potential returns per unit of risk. Veea Inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Veea Inc on September 25, 2024 and sell it today you would earn a total of  126.00  from holding Veea Inc or generate 50.4% return on investment over 90 days.

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

Chipotle Mexican Grill  vs.  Veea Inc

Chipotle Mexican Grill

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chipotle Mexican Grill are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Chipotle Mexican may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental 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 the company investors.

Pair Trading with Chipotle Mexican and Veea

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

The idea behind Chipotle Mexican Grill and Veea Inc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.