Correlation Between Shake Shack and NH Foods
Can any of the company-specific risk be diversified away by investing in both Shake Shack and NH Foods 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 NH Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and NH Foods Ltd, you can compare the effects of market volatilities on Shake Shack and NH Foods 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 NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and NH Foods.
Diversification Opportunities for Shake Shack and NH Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shake and NIPMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and NH Foods Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods 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 NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of Shake Shack i.e., Shake Shack and NH Foods go up and down completely randomly.
Pair Corralation between Shake Shack and NH Foods
If you would invest 13,051 in Shake Shack on September 13, 2024 and sell it today you would earn a total of 564.00 from holding Shake Shack or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shake Shack vs. NH Foods Ltd
Performance |
| Timeline |
| Shake Shack |
| NH Foods |
Shake Shack and NH Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and NH Foods
The main advantage of trading using opposite Shake Shack and NH Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, NH Foods 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 NH Foods will offset losses from the drop in NH Foods' long position.| Shake Shack vs. Dominos Pizza | Shake Shack vs. Papa Johns International | Shake Shack vs. Chipotle Mexican Grill | Shake Shack vs. Darden Restaurants |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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