Correlation Between Shake Shack and Pet Acquisition
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Pet Acquisition 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 Shake Shack and Pet Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Pet Acquisition LLC, you can compare the effects of market volatilities on Shake Shack and Pet Acquisition 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 Shake Shack with a short position of Pet Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Pet Acquisition.
Diversification Opportunities for Shake Shack and Pet Acquisition
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shake and Pet is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Pet Acquisition LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pet Acquisition LLC and Shake Shack 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 Shake Shack are associated (or correlated) with Pet Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pet Acquisition LLC has no effect on the direction of Shake Shack i.e., Shake Shack and Pet Acquisition go up and down completely randomly.
Pair Corralation between Shake Shack and Pet Acquisition
Given the investment horizon of 90 days Shake Shack is expected to generate 0.38 times more return on investment than Pet Acquisition. However, Shake Shack is 2.66 times less risky than Pet Acquisition. It trades about -0.06 of its potential returns per unit of risk. Pet Acquisition LLC is currently generating about -0.14 per unit of risk. If you would invest 10,238 in Shake Shack on January 26, 2024 and sell it today you would lose (284.00) from holding Shake Shack or give up 2.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Shake Shack vs. Pet Acquisition LLC
Performance |
Timeline |
Shake Shack |
Pet Acquisition LLC |
Shake Shack and Pet Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shake Shack and Pet Acquisition
The main advantage of trading using opposite Shake Shack and Pet Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Pet Acquisition 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 Pet Acquisition will offset losses from the drop in Pet Acquisition's long position.Shake Shack vs. Imax Corp | Shake Shack vs. Marcus | Shake Shack vs. AMC Networks | Shake Shack vs. Cinemark Holdings |
Pet Acquisition vs. Williams Sonoma | Pet Acquisition vs. AutoZone | Pet Acquisition vs. Ulta Beauty | Pet Acquisition vs. Best Buy Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |