Correlation Between Shake Shack and BOARDWALK
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By analyzing existing cross correlation between Shake Shack and BOARDWALK PIPELINES LP, you can compare the effects of market volatilities on Shake Shack and BOARDWALK 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 BOARDWALK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and BOARDWALK.
Diversification Opportunities for Shake Shack and BOARDWALK
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shake and BOARDWALK is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and BOARDWALK PIPELINES LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOARDWALK PIPELINES 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 BOARDWALK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOARDWALK PIPELINES has no effect on the direction of Shake Shack i.e., Shake Shack and BOARDWALK go up and down completely randomly.
Pair Corralation between Shake Shack and BOARDWALK
Given the investment horizon of 90 days Shake Shack is expected to generate 2.43 times more return on investment than BOARDWALK. However, Shake Shack is 2.43 times more volatile than BOARDWALK PIPELINES LP. It trades about 0.17 of its potential returns per unit of risk. BOARDWALK PIPELINES LP is currently generating about -0.22 per unit of risk. If you would invest 12,356 in Shake Shack on September 4, 2024 and sell it today you would earn a total of 993.00 from holding Shake Shack or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Shake Shack vs. BOARDWALK PIPELINES LP
Performance |
| Timeline |
| Shake Shack |
| BOARDWALK PIPELINES |
Shake Shack and BOARDWALK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and BOARDWALK
The main advantage of trading using opposite Shake Shack and BOARDWALK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, BOARDWALK 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 BOARDWALK will offset losses from the drop in BOARDWALK's long position.| Shake Shack vs. Hyatt Hotels | Shake Shack vs. Smart Share Global | Shake Shack vs. Sweetgreen | Shake Shack vs. Wyndham Hotels Resorts |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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