Correlation Between DTRGR and Shake Shack
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By analyzing existing cross correlation between DTRGR 25 14 DEC 31 and Shake Shack, you can compare the effects of market volatilities on DTRGR 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 DTRGR with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTRGR and Shake Shack.
Diversification Opportunities for DTRGR and Shake Shack
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DTRGR and Shake is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding DTRGR 25 14 DEC 31 and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and DTRGR 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 DTRGR 25 14 DEC 31 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 DTRGR i.e., DTRGR and Shake Shack go up and down completely randomly.
Pair Corralation between DTRGR and Shake Shack
Assuming the 90 days trading horizon DTRGR is expected to generate 9.89 times less return on investment than Shake Shack. But when comparing it to its historical volatility, DTRGR 25 14 DEC 31 is 6.04 times less risky than Shake Shack. It trades about 0.06 of its potential returns per unit of risk. Shake Shack is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,683 in Shake Shack on September 4, 2024 and sell it today you would earn a total of 6,551 from holding Shake Shack or generate 98.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.37% |
| Values | Daily Returns |
DTRGR 25 14 DEC 31 vs. Shake Shack
Performance |
| Timeline |
| DTRGR 25 14 |
| Shake Shack |
DTRGR and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTRGR and Shake Shack
The main advantage of trading using opposite DTRGR and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTRGR 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.The idea behind DTRGR 25 14 DEC 31 and Shake Shack pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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