Correlation Between Shake Shack and DST Systems
Can any of the company-specific risk be diversified away by investing in both Shake Shack and DST Systems 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 DST Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and DST Systems, you can compare the effects of market volatilities on Shake Shack and DST Systems 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 DST Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and DST Systems.
Diversification Opportunities for Shake Shack and DST Systems
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shake and DST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and DST Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DST Systems 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 DST Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DST Systems has no effect on the direction of Shake Shack i.e., Shake Shack and DST Systems go up and down completely randomly.
Pair Corralation between Shake Shack and DST Systems
If you would invest 12,356 in Shake Shack on September 4, 2024 and sell it today you would earn a total of 993.00 from holding Shake Shack or generate 8.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Shake Shack vs. DST Systems
Performance |
Timeline |
Shake Shack |
DST Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shake Shack and DST Systems Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shake Shack and DST Systems
The main advantage of trading using opposite Shake Shack and DST Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, DST Systems 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 DST Systems will offset losses from the drop in DST Systems' long position.Shake Shack vs. Hyatt Hotels | Shake Shack vs. Smart Share Global | Shake Shack vs. Sweetgreen | Shake Shack vs. Wyndham Hotels Resorts |
DST Systems vs. Senmiao Technology | DST Systems vs. Iridium Communications | DST Systems vs. Meiwu Technology Co | DST Systems vs. Aquestive Therapeutics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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