Correlation Between TARGET and Shake Shack
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By analyzing existing cross correlation between TARGET PORATION and Shake Shack, you can compare the effects of market volatilities on TARGET 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 TARGET with a short position of Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of TARGET and Shake Shack.
Diversification Opportunities for TARGET and Shake Shack
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TARGET and Shake is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding TARGET PORATION and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack and TARGET 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 TARGET PORATION 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 TARGET i.e., TARGET and Shake Shack go up and down completely randomly.
Pair Corralation between TARGET and Shake Shack
Assuming the 90 days trading horizon TARGET is expected to generate 15.38 times less return on investment than Shake Shack. But when comparing it to its historical volatility, TARGET PORATION is 9.48 times less risky than Shake Shack. It trades about 0.07 of its potential returns per unit of risk. Shake Shack is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,257 in Shake Shack on August 31, 2024 and sell it today you would earn a total of 4,116 from holding Shake Shack or generate 44.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.64% |
| Values | Daily Returns |
TARGET PORATION vs. Shake Shack
Performance |
| Timeline |
| TARGET PORATION |
| Shake Shack |
TARGET and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TARGET and Shake Shack
The main advantage of trading using opposite TARGET and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TARGET 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.| TARGET vs. Papaya Growth Opportunity | TARGET vs. Morgan Stanley | TARGET vs. Porvair plc | TARGET vs. Alvarium Tiedemann Holdings |
| Shake Shack vs. RLJ Lodging Trust | Shake Shack vs. Aquagold International | Shake Shack vs. Stepstone Group | Shake Shack vs. Morningstar Unconstrained Allocation |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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