Correlation Between Arrow Financial and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Arrow Financial and Sweetgreen 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 Arrow Financial and Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and Sweetgreen, you can compare the effects of market volatilities on Arrow Financial and Sweetgreen 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 Arrow Financial with a short position of Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and Sweetgreen.
Diversification Opportunities for Arrow Financial and Sweetgreen
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Sweetgreen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Arrow Financial 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 Arrow Financial are associated (or correlated) with Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of Arrow Financial i.e., Arrow Financial and Sweetgreen go up and down completely randomly.
Pair Corralation between Arrow Financial and Sweetgreen
Given the investment horizon of 90 days Arrow Financial is expected to under-perform the Sweetgreen. But the stock apears to be less risky and, when comparing its historical volatility, Arrow Financial is 4.97 times less risky than Sweetgreen. The stock trades about -0.37 of its potential returns per unit of risk. The Sweetgreen is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,926 in Sweetgreen on September 12, 2024 and sell it today you would lose (266.00) from holding Sweetgreen or give up 6.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. Sweetgreen
Performance |
| Timeline |
| Arrow Financial |
| Sweetgreen |
Arrow Financial and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and Sweetgreen
The main advantage of trading using opposite Arrow Financial and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial position performs unexpectedly, Sweetgreen 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 Sweetgreen will offset losses from the drop in Sweetgreen's long position.| Arrow Financial vs. Heritage Commerce Corp | Arrow Financial vs. Westamerica Bancorporation | Arrow Financial vs. Heritage Financial | Arrow Financial vs. National Bankshares |
| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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