Correlation Between Shake Shack and Tefron
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Tefron 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 Tefron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Tefron, you can compare the effects of market volatilities on Shake Shack and Tefron 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 Tefron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Tefron.
Diversification Opportunities for Shake Shack and Tefron
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shake and Tefron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Tefron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tefron 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 Tefron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tefron has no effect on the direction of Shake Shack i.e., Shake Shack and Tefron go up and down completely randomly.
Pair Corralation between Shake Shack and Tefron
If you would invest (100.00) in Tefron on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Tefron or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Shake Shack vs. Tefron
Performance |
| Timeline |
| Shake Shack |
| Tefron |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Shake Shack and Tefron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Tefron
The main advantage of trading using opposite Shake Shack and Tefron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Tefron 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 Tefron will offset losses from the drop in Tefron'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 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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