Correlation Between Life Time and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Life Time 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 Life Time and Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Time Group and Sweetgreen, you can compare the effects of market volatilities on Life Time 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 Life Time with a short position of Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Sweetgreen.
Diversification Opportunities for Life Time and Sweetgreen
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Life and Sweetgreen is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Life Time 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 Life Time Group 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 Life Time i.e., Life Time and Sweetgreen go up and down completely randomly.
Pair Corralation between Life Time and Sweetgreen
Considering the 90-day investment horizon Life Time is expected to generate 2.35 times less return on investment than Sweetgreen. But when comparing it to its historical volatility, Life Time Group is 1.66 times less risky than Sweetgreen. It trades about 0.06 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,081 in Sweetgreen on September 3, 2024 and sell it today you would earn a total of 3,017 from holding Sweetgreen or generate 279.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. Sweetgreen
Performance |
| Timeline |
| Life Time Group |
| Sweetgreen |
Life Time and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Sweetgreen
The main advantage of trading using opposite Life Time and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time 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.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Mattel Inc | Life Time vs. OneSpaWorld Holdings |
| Sweetgreen vs. Highway Holdings Limited | Sweetgreen vs. QCR Holdings | Sweetgreen vs. Partner Communications | Sweetgreen vs. Acumen Pharmaceuticals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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