Correlation Between Sable Offshore and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Shake Shack 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 Sable Offshore and Shake Shack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sable Offshore Corp and Shake Shack, you can compare the effects of market volatilities on Sable Offshore and Shake Shack 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 Sable Offshore with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Shake Shack.
Diversification Opportunities for Sable Offshore and Shake Shack
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sable and Shake is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and Sable Offshore 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 Sable Offshore Corp are associated (or correlated) with Shake Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shake Shack has no effect on the direction of Sable Offshore i.e., Sable Offshore and Shake Shack go up and down completely randomly.
Pair Corralation between Sable Offshore and Shake Shack
Considering the 90-day investment horizon Sable Offshore Corp is expected to under-perform the Shake Shack. In addition to that, Sable Offshore is 1.6 times more volatile than Shake Shack. It trades about -0.06 of its total potential returns per unit of risk. Shake Shack is currently generating about 0.17 per unit of volatility. 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sable Offshore Corp vs. Shake Shack
Performance |
| Timeline |
| Sable Offshore Corp |
| Shake Shack |
Sable Offshore and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Shake Shack
The main advantage of trading using opposite Sable Offshore and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Shake Shack 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 Shake Shack will offset losses from the drop in Shake Shack's long position.| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Global Correlations Find global opportunities by holding instruments from different markets |