Correlation Between Shake Shack and MFA Financial
Can any of the company-specific risk be diversified away by investing in both Shake Shack and MFA Financial 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 MFA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and MFA Financial SR, you can compare the effects of market volatilities on Shake Shack and MFA Financial 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 MFA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and MFA Financial.
Diversification Opportunities for Shake Shack and MFA Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shake and MFA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and MFA Financial SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFA Financial SR 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 MFA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFA Financial SR has no effect on the direction of Shake Shack i.e., Shake Shack and MFA Financial go up and down completely randomly.
Pair Corralation between Shake Shack and MFA Financial
If you would invest 5,605 in Shake Shack on January 2, 2025 and sell it today you would earn a total of 3,495 from holding Shake Shack or generate 62.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Shake Shack vs. MFA Financial SR
Performance |
| Timeline |
| Shake Shack |
| MFA Financial SR |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Shake Shack and MFA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and MFA Financial
The main advantage of trading using opposite Shake Shack and MFA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, MFA Financial 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 MFA Financial will offset losses from the drop in MFA Financial'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 |
| MFA Financial vs. Cimpress NV | MFA Financial vs. Boston Omaha Corp | MFA Financial vs. National CineMedia | MFA Financial vs. Boston Properties |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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