Correlation Between Teleflex Incorporated and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated 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 Teleflex Incorporated and Shake Shack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleflex Incorporated and Shake Shack, you can compare the effects of market volatilities on Teleflex Incorporated 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 Teleflex Incorporated with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and Shake Shack.
Diversification Opportunities for Teleflex Incorporated and Shake Shack
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Teleflex and Shake is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and Teleflex Incorporated 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 Teleflex Incorporated 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 Teleflex Incorporated i.e., Teleflex Incorporated and Shake Shack go up and down completely randomly.
Pair Corralation between Teleflex Incorporated and Shake Shack
Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the Shake Shack. But the stock apears to be less risky and, when comparing its historical volatility, Teleflex Incorporated is 1.55 times less risky than Shake Shack. The stock trades about -0.04 of its potential returns per unit of risk. The Shake Shack is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,834 in Shake Shack on September 12, 2024 and sell it today you would earn a total of 5,494 from holding Shake Shack or generate 70.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleflex Incorporated vs. Shake Shack
Performance |
| Timeline |
| Teleflex Incorporated |
| Shake Shack |
Teleflex Incorporated and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleflex Incorporated and Shake Shack
The main advantage of trading using opposite Teleflex Incorporated and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated 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.| Teleflex Incorporated vs. West Pharmaceutical Services | Teleflex Incorporated vs. Alcon AG | Teleflex Incorporated vs. ResMed Inc | Teleflex Incorporated vs. ICU Medical |
| Shake Shack vs. Noble Romans | Shake Shack vs. Good Times Restaurants | Shake Shack vs. Flanigans Enterprises | Shake Shack vs. FAT Brands |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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