Correlation Between Shake Shack and LOWES
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By analyzing existing cross correlation between Shake Shack and LOWES PANIES INC, you can compare the effects of market volatilities on Shake Shack and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and LOWES.
Diversification Opportunities for Shake Shack and LOWES
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shake and LOWES is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Shake Shack i.e., Shake Shack and LOWES go up and down completely randomly.
Pair Corralation between Shake Shack and LOWES
Given the investment horizon of 90 days Shake Shack is expected to generate 3.22 times more return on investment than LOWES. However, Shake Shack is 3.22 times more volatile than LOWES PANIES INC. It trades about 0.13 of its potential returns per unit of risk. LOWES PANIES INC is currently generating about -0.02 per unit of risk. If you would invest 12,407 in Shake Shack on September 15, 2024 and sell it today you would earn a total of 752.00 from holding Shake Shack or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shake Shack vs. LOWES PANIES INC
Performance |
| Timeline |
| Shake Shack |
| LOWES PANIES INC |
Shake Shack and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and LOWES
The main advantage of trading using opposite Shake Shack and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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