Correlation Between Shake Shack and Wingstop
Can any of the company-specific risk be diversified away by investing in both Shake Shack and Wingstop 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 Wingstop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shake Shack and Wingstop, you can compare the effects of market volatilities on Shake Shack and Wingstop 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 Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shake Shack and Wingstop.
Diversification Opportunities for Shake Shack and Wingstop
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shake and Wingstop is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shake Shack and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop 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 Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of Shake Shack i.e., Shake Shack and Wingstop go up and down completely randomly.
Pair Corralation between Shake Shack and Wingstop
Given the investment horizon of 90 days Shake Shack is expected to under-perform the Wingstop. But the stock apears to be less risky and, when comparing its historical volatility, Shake Shack is 1.43 times less risky than Wingstop. The stock trades about -0.05 of its potential returns per unit of risk. The Wingstop is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 24,429 in Wingstop on October 7, 2025 and sell it today you would earn a total of 1,255 from holding Wingstop or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Shake Shack vs. Wingstop
Performance |
| Timeline |
| Shake Shack |
| Wingstop |
Shake Shack and Wingstop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shake Shack and Wingstop
The main advantage of trading using opposite Shake Shack and Wingstop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shake Shack position performs unexpectedly, Wingstop 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 Wingstop will offset losses from the drop in Wingstop's long position.| Shake Shack vs. Hilton Grand Vacations | Shake Shack vs. Sonoco Products | Shake Shack vs. Polaris Industries | Shake Shack vs. Skyline |
| Wingstop vs. CAVA Group | Wingstop vs. Etsy Inc | Wingstop vs. Bright Horizons Family | Wingstop vs. Brinker International |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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