Correlation Between Dow Jones and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Sweetgreen, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sweetgreen.
Diversification Opportunities for Dow Jones and Sweetgreen
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Sweetgreen is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Sweetgreen go up and down completely randomly.
Pair Corralation between Dow Jones and Sweetgreen
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.14 times less return on investment than Sweetgreen. But when comparing it to its historical volatility, Dow Jones Industrial is 4.78 times less risky than Sweetgreen. It trades about 0.15 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,689 in Sweetgreen on August 24, 2024 and sell it today you would earn a total of 436.00 from holding Sweetgreen or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Sweetgreen
Performance |
| Timeline |
Dow Jones and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sweetgreen
Pair trading matchups for Sweetgreen
Pair Trading with Dow Jones and Sweetgreen
The main advantage of trading using opposite Dow Jones and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |