Correlation Between Allbirds and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Allbirds 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 Allbirds and Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allbirds and Sweetgreen, you can compare the effects of market volatilities on Allbirds 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 Allbirds with a short position of Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allbirds and Sweetgreen.
Diversification Opportunities for Allbirds and Sweetgreen
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allbirds and Sweetgreen is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Allbirds and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Allbirds 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 Allbirds 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 Allbirds i.e., Allbirds and Sweetgreen go up and down completely randomly.
Pair Corralation between Allbirds and Sweetgreen
Given the investment horizon of 90 days Allbirds is expected to under-perform the Sweetgreen. In addition to that, Allbirds is 1.27 times more volatile than Sweetgreen. It trades about -0.03 of its total potential returns per unit of risk. Sweetgreen is currently generating about 0.1 per unit of volatility. If you would invest 849.00 in Sweetgreen on August 28, 2024 and sell it today you would earn a total of 3,548 from holding Sweetgreen or generate 417.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allbirds vs. Sweetgreen
Performance |
| Timeline |
| Allbirds |
| Sweetgreen |
Allbirds and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allbirds and Sweetgreen
The main advantage of trading using opposite Allbirds and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allbirds 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.| Allbirds vs. Stitch Fix | Allbirds vs. Genesco | Allbirds vs. Shoe Carnival | Allbirds vs. Lulus Fashion Lounge |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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