Correlation Between Kandi Technologies and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies 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 Kandi Technologies and Shake Shack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kandi Technologies Group and Shake Shack, you can compare the effects of market volatilities on Kandi Technologies 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 Kandi Technologies with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Shake Shack.
Diversification Opportunities for Kandi Technologies and Shake Shack
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kandi and Shake is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and Kandi Technologies 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 Kandi Technologies Group 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 Kandi Technologies i.e., Kandi Technologies and Shake Shack go up and down completely randomly.
Pair Corralation between Kandi Technologies and Shake Shack
Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Shake Shack. In addition to that, Kandi Technologies is 1.12 times more volatile than Shake Shack. It trades about -0.08 of its total potential returns per unit of risk. Shake Shack is currently generating about 0.11 per unit of volatility. If you would invest 6,683 in Shake Shack on September 4, 2024 and sell it today you would earn a total of 6,551 from holding Shake Shack or generate 98.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandi Technologies Group vs. Shake Shack
Performance |
| Timeline |
| Kandi Technologies |
| Shake Shack |
Kandi Technologies and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandi Technologies and Shake Shack
The main advantage of trading using opposite Kandi Technologies and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies 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.| Kandi Technologies vs. Ford Motor | Kandi Technologies vs. General Motors | Kandi Technologies vs. Goodyear Tire Rubber | Kandi Technologies vs. Li Auto |
| Shake Shack vs. Hyatt Hotels | Shake Shack vs. Smart Share Global | Shake Shack vs. Sweetgreen | Shake Shack vs. Wyndham Hotels Resorts |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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