Correlation Between BT Brands and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both BT Brands 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 BT Brands and Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BT Brands Warrant and Sweetgreen, you can compare the effects of market volatilities on BT Brands 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 BT Brands with a short position of Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of BT Brands and Sweetgreen.
Diversification Opportunities for BT Brands and Sweetgreen
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTBDW and Sweetgreen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BT Brands Warrant and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and BT Brands 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 BT Brands Warrant 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 BT Brands i.e., BT Brands and Sweetgreen go up and down completely randomly.
Pair Corralation between BT Brands and Sweetgreen
Assuming the 90 days horizon BT Brands Warrant is expected to generate 2.88 times more return on investment than Sweetgreen. However, BT Brands is 2.88 times more volatile than Sweetgreen. It trades about 0.45 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.13 per unit of risk. If you would invest 6.23 in BT Brands Warrant on August 24, 2024 and sell it today you would earn a total of 3.21 from holding BT Brands Warrant or generate 51.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 36.36% |
| Values | Daily Returns |
BT Brands Warrant vs. Sweetgreen
Performance |
| Timeline |
| BT Brands Warrant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Sweetgreen |
BT Brands and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BT Brands and Sweetgreen
The main advantage of trading using opposite BT Brands and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BT Brands 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.| BT Brands vs. Bloomin Brands | BT Brands vs. BJs Restaurants | BT Brands vs. Darden Restaurants | BT Brands vs. Wingstop |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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