Correlation Between Shake Shack and SOCGEN

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

By analyzing existing cross correlation between Shake Shack and SOCGEN 6447 12 JAN 27, you can compare the effects of market volatilities on Shake Shack and SOCGEN 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 SOCGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and SOCGEN.

Diversification Opportunities for Shake Shack and SOCGEN

0.3

Correlation Coefficient

Shake Shack  SOCGEN

Weak diversification

The 3 months correlation between Shake and SOCGEN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and SOCGEN 6447 12 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCGEN 6447 12 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 SOCGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCGEN 6447 12 has no effect on the direction of Shake Shack i.e., Shake Shack and SOCGEN go up and down completely randomly.

Pair Corralation between Shake Shack and SOCGEN

Given the investment horizon of 90 days Shake Shack is expected to under-perform the SOCGEN. In addition to that, Shake Shack is 58.83 times more volatile than SOCGEN 6447 12 JAN 27. It trades about -0.16 of its total potential returns per unit of risk. SOCGEN 6447 12 JAN 27 is currently generating about 0.03 per unit of volatility. If you would invest  10,121  in SOCGEN 6447 12 JAN 27 on December 30, 2024 and sell it today you would earn a total of  6.00  from holding SOCGEN 6447 12 JAN 27 or generate 0.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	54.84%
Values	Daily Returns

Shake Shack  vs.  SOCGEN 6447 12 JAN 27

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.

SOCGEN 6447 12

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SOCGEN 6447 12 JAN 27 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SOCGEN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shake Shack and SOCGEN

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

The idea behind Shake Shack and SOCGEN 6447 12 JAN 27 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.