Correlation Between PRINCIPAL and Shake Shack
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By analyzing existing cross correlation between PRINCIPAL FINL GROUP and Shake Shack, you can compare the effects of market volatilities on PRINCIPAL 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 PRINCIPAL with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRINCIPAL and Shake Shack.
Diversification Opportunities for PRINCIPAL and Shake Shack
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PRINCIPAL and Shake is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding PRINCIPAL FINL GROUP and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and PRINCIPAL 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 PRINCIPAL FINL GROUP 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 PRINCIPAL i.e., PRINCIPAL and Shake Shack go up and down completely randomly.
Pair Corralation between PRINCIPAL and Shake Shack
Assuming the 90 days trading horizon PRINCIPAL FINL GROUP is expected to generate 0.76 times more return on investment than Shake Shack. However, PRINCIPAL FINL GROUP is 1.32 times less risky than Shake Shack. It trades about 0.31 of its potential returns per unit of risk. Shake Shack is currently generating about 0.17 per unit of risk. If you would invest 8,660 in PRINCIPAL FINL GROUP on September 4, 2024 and sell it today you would earn a total of 334.00 from holding PRINCIPAL FINL GROUP or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.33% |
| Values | Daily Returns |
PRINCIPAL FINL GROUP vs. Shake Shack
Performance |
| Timeline |
| PRINCIPAL FINL GROUP |
| Shake Shack |
PRINCIPAL and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PRINCIPAL and Shake Shack
The main advantage of trading using opposite PRINCIPAL and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PRINCIPAL 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.| PRINCIPAL vs. Shake Shack | PRINCIPAL vs. Dominos Pizza | PRINCIPAL vs. First Watch Restaurant | PRINCIPAL vs. Sligro Food Group |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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