Correlation Between Jollibee Foods and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods 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 Jollibee Foods and Shake Shack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jollibee Foods and Shake Shack, you can compare the effects of market volatilities on Jollibee Foods 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 Jollibee Foods with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Shake Shack.
Diversification Opportunities for Jollibee Foods and Shake Shack
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jollibee and Shake is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and Jollibee Foods 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 Jollibee Foods 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 Jollibee Foods i.e., Jollibee Foods and Shake Shack go up and down completely randomly.
Pair Corralation between Jollibee Foods and Shake Shack
Assuming the 90 days horizon Jollibee Foods is expected to generate 2.12 times more return on investment than Shake Shack. However, Jollibee Foods is 2.12 times more volatile than Shake Shack. It trades about -0.1 of its potential returns per unit of risk. Shake Shack is currently generating about -0.22 per unit of risk. If you would invest 465.00 in Jollibee Foods on November 2, 2024 and sell it today you would lose (45.00) from holding Jollibee Foods or give up 9.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Jollibee Foods vs. Shake Shack
Performance |
| Timeline |
| Jollibee Foods |
| Shake Shack |
Jollibee Foods and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Shake Shack
The main advantage of trading using opposite Jollibee Foods and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods 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.| Jollibee Foods vs. Dominos Pizza Group | Jollibee Foods vs. Compass Group PLC | Jollibee Foods vs. The Cheesecake Factory | Jollibee Foods vs. Rave Restaurant Group |
| Shake Shack vs. Dominos Pizza Common | 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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