Correlation Between Shake Shack and Freedom Internet
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Freedom Internet 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 Freedom Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Freedom Internet Group, you can compare the effects of market volatilities on Shake Shack and Freedom Internet 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 Freedom Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Freedom Internet.
Diversification Opportunities for Shake Shack and Freedom Internet
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shake and Freedom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Freedom Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Internet 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 Freedom Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Internet has no effect on the direction of Shake Shack i.e., Shake Shack and Freedom Internet go up and down completely randomly.
Pair Corralation between Shake Shack and Freedom Internet
If you would invest 6,905 in Shake Shack on August 31, 2024 and sell it today you would earn a total of 6,468 from holding Shake Shack or generate 93.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Shake Shack vs. Freedom Internet Group
Performance |
| Timeline |
| Shake Shack |
| Freedom Internet |
Shake Shack and Freedom Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Freedom Internet
The main advantage of trading using opposite Shake Shack and Freedom Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Freedom Internet 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 Freedom Internet will offset losses from the drop in Freedom Internet's long position.| Shake Shack vs. RLJ Lodging Trust | Shake Shack vs. Aquagold International | Shake Shack vs. Stepstone Group | Shake Shack vs. Morningstar Unconstrained Allocation |
| Freedom Internet vs. Visa Class A | Freedom Internet vs. Mastercard | Freedom Internet vs. American Express | Freedom Internet vs. PayPal Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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