Correlation Between Compania Cervecerias and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias 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 Compania Cervecerias and Shake Shack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Cervecerias Unidas and Shake Shack, you can compare the effects of market volatilities on Compania Cervecerias 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 Compania Cervecerias with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Shake Shack.
Diversification Opportunities for Compania Cervecerias and Shake Shack
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Compania and Shake is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and Compania Cervecerias 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 Compania Cervecerias Unidas 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 Compania Cervecerias i.e., Compania Cervecerias and Shake Shack go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Shake Shack
Considering the 90-day investment horizon Compania Cervecerias is expected to generate 1.75 times less return on investment than Shake Shack. But when comparing it to its historical volatility, Compania Cervecerias Unidas is 1.52 times less risky than Shake Shack. It trades about 0.17 of its potential returns per unit of risk. Shake Shack is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 12,167 in Shake Shack on September 1, 2024 and sell it today you would earn a total of 1,206 from holding Shake Shack or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Shake Shack
Performance |
| Timeline |
| Compania Cervecerias |
| Shake Shack |
Compania Cervecerias and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Shake Shack
The main advantage of trading using opposite Compania Cervecerias and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias 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.| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
| Shake Shack vs. Dominos Pizza | Shake Shack vs. Papa Johns International | Shake Shack vs. Chipotle Mexican Grill | Shake Shack vs. Darden Restaurants |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| CEOs Directory Screen CEOs from public companies around the world |