Correlation Between Shake Shack and Inhibrx
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Inhibrx 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 Inhibrx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Inhibrx, you can compare the effects of market volatilities on Shake Shack and Inhibrx 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 Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Inhibrx.
Diversification Opportunities for Shake Shack and Inhibrx
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shake and Inhibrx is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx 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 Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of Shake Shack i.e., Shake Shack and Inhibrx go up and down completely randomly.
Pair Corralation between Shake Shack and Inhibrx
Given the investment horizon of 90 days Shake Shack is expected to under-perform the Inhibrx. But the stock apears to be less risky and, when comparing its historical volatility, Shake Shack is 1.87 times less risky than Inhibrx. The stock trades about -0.33 of its potential returns per unit of risk. The Inhibrx is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,447 in Inhibrx on October 22, 2024 and sell it today you would lose (98.00) from holding Inhibrx or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Shake Shack vs. Inhibrx
Performance |
| Timeline |
| Shake Shack |
| Inhibrx |
Shake Shack and Inhibrx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Inhibrx
The main advantage of trading using opposite Shake Shack and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Inhibrx 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 Inhibrx will offset losses from the drop in Inhibrx's long position.| Shake Shack vs. Dominos Pizza Common | Shake Shack vs. Papa Johns International | Shake Shack vs. Chipotle Mexican Grill | Shake Shack vs. Darden Restaurants |
| Inhibrx vs. Crinetics Pharmaceuticals | Inhibrx vs. Merus BV | Inhibrx vs. Lyell Immunopharma | Inhibrx vs. Kronos Bio |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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