Correlation Between Shake Shack and Top KingWin
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Top KingWin 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 Top KingWin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Top KingWin Ltd, you can compare the effects of market volatilities on Shake Shack and Top KingWin 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 Top KingWin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Top KingWin.
Diversification Opportunities for Shake Shack and Top KingWin
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shake and Top is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Top KingWin Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Shake Shack i.e., Shake Shack and Top KingWin go up and down completely randomly.
Pair Corralation between Shake Shack and Top KingWin
Given the investment horizon of 90 days Shake Shack is expected to generate 11.64 times less return on investment than Top KingWin. But when comparing it to its historical volatility, Shake Shack is 18.6 times less risky than Top KingWin. It trades about 0.08 of its potential returns per unit of risk. Top KingWin Ltd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Top KingWin Ltd on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Top KingWin Ltd or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.42% |
| Values | Daily Returns |
Shake Shack vs. Top KingWin Ltd
Performance |
| Timeline |
| Shake Shack |
| Top KingWin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Shake Shack and Top KingWin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Top KingWin
The main advantage of trading using opposite Shake Shack and Top KingWin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Top KingWin 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 Top KingWin will offset losses from the drop in Top KingWin's long position.| Shake Shack vs. Highway Holdings Limited | Shake Shack vs. QCR Holdings | Shake Shack vs. Partner Communications | Shake Shack vs. Acumen Pharmaceuticals |
| Top KingWin vs. Dave Busters Entertainment | Top KingWin vs. Nyxoah | Top KingWin vs. Virco Manufacturing | Top KingWin vs. Pinterest |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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