Correlation Between Shake Shack and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Fidus Investment 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 Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Fidus Investment Corp, you can compare the effects of market volatilities on Shake Shack and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Fidus Investment.
Diversification Opportunities for Shake Shack and Fidus Investment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shake and Fidus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Shake Shack i.e., Shake Shack and Fidus Investment go up and down completely randomly.
Pair Corralation between Shake Shack and Fidus Investment
Given the investment horizon of 90 days Shake Shack is expected to generate 1.23 times less return on investment than Fidus Investment. In addition to that, Shake Shack is 3.27 times more volatile than Fidus Investment Corp. It trades about 0.18 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.71 per unit of volatility. If you would invest 1,920 in Fidus Investment Corp on September 3, 2024 and sell it today you would earn a total of 209.00 from holding Fidus Investment Corp or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shake Shack vs. Fidus Investment Corp
Performance |
| Timeline |
| Shake Shack |
| Fidus Investment Corp |
Shake Shack and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Fidus Investment
The main advantage of trading using opposite Shake Shack and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| Shake Shack vs. Highway Holdings Limited | Shake Shack vs. QCR Holdings | Shake Shack vs. Partner Communications | Shake Shack vs. Acumen Pharmaceuticals |
| Fidus Investment vs. Federated Premier Municipal | Fidus Investment vs. Blackrock Muniyield | Fidus Investment vs. Federated Investors B | Fidus Investment vs. SEI Investments |
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 Stocks Directory module to find actively traded stocks across global markets.
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