Correlation Between Shake Shack and Monument Circle
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Monument Circle 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 Monument Circle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Monument Circle Acquisition, you can compare the effects of market volatilities on Shake Shack and Monument Circle 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 Monument Circle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Monument Circle.
Diversification Opportunities for Shake Shack and Monument Circle
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shake and Monument is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Monument Circle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Circle Acqu 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 Monument Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Circle Acqu has no effect on the direction of Shake Shack i.e., Shake Shack and Monument Circle go up and down completely randomly.
Pair Corralation between Shake Shack and Monument Circle
If you would invest (100.00) in Monument Circle Acquisition on October 13, 2024 and sell it today you would earn a total of 100.00 from holding Monument Circle Acquisition or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Shake Shack vs. Monument Circle Acquisition
Performance |
| Timeline |
| Shake Shack |
| Monument Circle Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shake Shack and Monument Circle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Monument Circle
The main advantage of trading using opposite Shake Shack and Monument Circle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Monument Circle 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 Monument Circle will offset losses from the drop in Monument Circle'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 |
| Monument Circle vs. Boyd Gaming | Monument Circle vs. Shake Shack | Monument Circle vs. Suntory Beverage Food | Monument Circle vs. Vita Coco |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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