Correlation Between Abacus Life and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Abacus Life and Shake Shack 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 Abacus Life and Shake Shack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abacus Life and Shake Shack, you can compare the effects of market volatilities on Abacus Life and Shake Shack 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 Abacus Life with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abacus Life and Shake Shack.
Diversification Opportunities for Abacus Life and Shake Shack
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abacus and Shake is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and Abacus Life 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 Abacus Life are associated (or correlated) with Shake Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shake Shack has no effect on the direction of Abacus Life i.e., Abacus Life and Shake Shack go up and down completely randomly.
Pair Corralation between Abacus Life and Shake Shack
Considering the 90-day investment horizon Abacus Life is expected to under-perform the Shake Shack. In addition to that, Abacus Life is 1.72 times more volatile than Shake Shack. It trades about -0.06 of its total potential returns per unit of risk. Shake Shack is currently generating about 0.05 per unit of volatility. If you would invest 13,073 in Shake Shack on September 12, 2024 and sell it today you would earn a total of 255.00 from holding Shake Shack or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abacus Life vs. Shake Shack
Performance |
| Timeline |
| Abacus Life |
| Shake Shack |
Abacus Life and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abacus Life and Shake Shack
The main advantage of trading using opposite Abacus Life and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abacus Life position performs unexpectedly, Shake Shack 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 Shake Shack will offset losses from the drop in Shake Shack's long position.| Abacus Life vs. FG Annuities Life | Abacus Life vs. Globe Life | Abacus Life vs. MetLife Preferred Stock | Abacus Life vs. MetLife Preferred Stock |
| Shake Shack vs. Noble Romans | Shake Shack vs. Good Times Restaurants | Shake Shack vs. Flanigans Enterprises | Shake Shack vs. FAT Brands |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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