Correlation Between Shake Shack and Global
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By analyzing existing cross correlation between Shake Shack and Global Payments 415, you can compare the effects of market volatilities on Shake Shack and Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Global.
Diversification Opportunities for Shake Shack and Global
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shake and Global is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Global Payments 415 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments 415 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments 415 has no effect on the direction of Shake Shack i.e., Shake Shack and Global go up and down completely randomly.
Pair Corralation between Shake Shack and Global
Given the investment horizon of 90 days Shake Shack is expected to generate 2.31 times more return on investment than Global. However, Shake Shack is 2.31 times more volatile than Global Payments 415. It trades about 0.1 of its potential returns per unit of risk. Global Payments 415 is currently generating about 0.0 per unit of risk. If you would invest 6,326 in Shake Shack on September 3, 2024 and sell it today you would earn a total of 7,047 from holding Shake Shack or generate 111.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.52% |
| Values | Daily Returns |
Shake Shack vs. Global Payments 415
Performance |
| Timeline |
| Shake Shack |
| Global Payments 415 |
Shake Shack and Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Global
The main advantage of trading using opposite Shake Shack and Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Global 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 Global will offset losses from the drop in Global's long position.| Shake Shack vs. Highway Holdings Limited | Shake Shack vs. QCR Holdings | Shake Shack vs. Partner Communications | Shake Shack vs. Acumen Pharmaceuticals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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