Correlation Between Chipotle Mexican and Tapestry
Can any of the company-specific risk be diversified away by investing in both Chipotle Mexican and Tapestry 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 Tapestry 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 Tapestry, you can compare the effects of market volatilities on Chipotle Mexican and Tapestry 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 Tapestry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chipotle Mexican and Tapestry.
Diversification Opportunities for Chipotle Mexican and Tapestry
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chipotle and Tapestry is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Chipotle Mexican Grill and Tapestry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tapestry 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 Tapestry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tapestry has no effect on the direction of Chipotle Mexican i.e., Chipotle Mexican and Tapestry go up and down completely randomly.
Pair Corralation between Chipotle Mexican and Tapestry
Considering the 90-day investment horizon Chipotle Mexican Grill is expected to under-perform the Tapestry. But the stock apears to be less risky and, when comparing its historical volatility, Chipotle Mexican Grill is 1.25 times less risky than Tapestry. The stock trades about -0.07 of its potential returns per unit of risk. The Tapestry is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,336 in Tapestry on June 1, 2025 and sell it today you would earn a total of 1,846 from holding Tapestry or generate 22.14% 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. Tapestry
Performance |
| Timeline |
| Chipotle Mexican Grill |
| Tapestry |
Chipotle Mexican and Tapestry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chipotle Mexican and Tapestry
The main advantage of trading using opposite Chipotle Mexican and Tapestry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chipotle Mexican position performs unexpectedly, Tapestry 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 Tapestry will offset losses from the drop in Tapestry's long position.| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza Common | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
| Tapestry vs. Levi Strauss Co | Tapestry vs. Under Armour A | Tapestry vs. Columbia Sportswear | Tapestry vs. Oxford Industries |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |