Correlation Between Shake Shack and 552953CD1
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By analyzing existing cross correlation between Shake Shack and MGM Resorts International, you can compare the effects of market volatilities on Shake Shack and 552953CD1 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 552953CD1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and 552953CD1.
Diversification Opportunities for Shake Shack and 552953CD1
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shake and 552953CD1 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and MGM Resorts International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM Resorts International 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 552953CD1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM Resorts International has no effect on the direction of Shake Shack i.e., Shake Shack and 552953CD1 go up and down completely randomly.
Pair Corralation between Shake Shack and 552953CD1
Given the investment horizon of 90 days Shake Shack is expected to generate 7.17 times less return on investment than 552953CD1. But when comparing it to its historical volatility, Shake Shack is 16.37 times less risky than 552953CD1. It trades about 0.09 of its potential returns per unit of risk. MGM Resorts International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,213 in MGM Resorts International on September 13, 2024 and sell it today you would earn a total of 412.00 from holding MGM Resorts International or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.15% |
| Values | Daily Returns |
Shake Shack vs. MGM Resorts International
Performance |
| Timeline |
| Shake Shack |
| MGM Resorts International |
Shake Shack and 552953CD1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and 552953CD1
The main advantage of trading using opposite Shake Shack and 552953CD1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, 552953CD1 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 552953CD1 will offset losses from the drop in 552953CD1'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 |
| 552953CD1 vs. Kandi Technologies Group | 552953CD1 vs. Reservoir Media | 552953CD1 vs. Shake Shack | 552953CD1 vs. Meli Hotels International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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