Correlation Between Shake Shack and Integrated Drilling
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Integrated Drilling 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 Integrated Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Integrated Drilling Equipment, you can compare the effects of market volatilities on Shake Shack and Integrated Drilling 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 Integrated Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Integrated Drilling.
Diversification Opportunities for Shake Shack and Integrated Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shake and Integrated is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Integrated Drilling Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Drilling 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 Integrated Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Drilling has no effect on the direction of Shake Shack i.e., Shake Shack and Integrated Drilling go up and down completely randomly.
Pair Corralation between Shake Shack and Integrated Drilling
If you would invest 8,804 in Shake Shack on September 25, 2024 and sell it today you would earn a total of 4,366 from holding Shake Shack or generate 49.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 99.21% |
Values | Daily Returns |
Shake Shack vs. Integrated Drilling Equipment
Performance |
Timeline |
Shake Shack |
Integrated Drilling |
Shake Shack and Integrated Drilling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shake Shack and Integrated Drilling
The main advantage of trading using opposite Shake Shack and Integrated Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Integrated Drilling 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 Integrated Drilling will offset losses from the drop in Integrated Drilling's long position.Shake Shack vs. Dominos Pizza | Shake Shack vs. Papa Johns International | Shake Shack vs. Chipotle Mexican Grill | Shake Shack vs. Darden Restaurants |
Integrated Drilling vs. Valeura Energy | Integrated Drilling vs. Invictus Energy Limited | Integrated Drilling vs. ConnectOne Bancorp | Integrated Drilling vs. RCM Technologies |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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