Correlation Between Shake Shack and AERWINS Technologies

Can any of the company-specific risk be diversified away by investing in both Shake Shack and AERWINS Technologies 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 Shake Shack and AERWINS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shake Shack and AERWINS Technologies, you can compare the effects of market volatilities on Shake Shack and AERWINS Technologies 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 Shake Shack with a short position of AERWINS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and AERWINS Technologies.

Diversification Opportunities for Shake Shack and AERWINS Technologies

0.0

Correlation Coefficient

Shake Shack  AERWINS Technologies

Pay attention - limited upside

The 3 months correlation between Shake and AERWINS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and AERWINS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERWINS Technologies and Shake Shack 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 Shake Shack are associated (or correlated) with AERWINS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERWINS Technologies has no effect on the direction of Shake Shack i.e., Shake Shack and AERWINS Technologies go up and down completely randomly.

Pair Corralation between Shake Shack and AERWINS Technologies

If you would invest (100.00) in AERWINS Technologies on December 29, 2024 and sell it today you would earn a total of  100.00  from holding AERWINS Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shake Shack  vs.  AERWINS Technologies

Shake Shack

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shake Shack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

AERWINS Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days AERWINS Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, AERWINS Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Shake Shack and AERWINS Technologies

The main advantage of trading using opposite Shake Shack and AERWINS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, AERWINS Technologies 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 AERWINS Technologies will offset losses from the drop in AERWINS Technologies' long position.

The idea behind Shake Shack and AERWINS Technologies 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.

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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.