Correlation Between Sweetgreen and Afya
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Afya 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 Sweetgreen and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Afya, you can compare the effects of market volatilities on Sweetgreen and Afya 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 Sweetgreen with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Afya.
Diversification Opportunities for Sweetgreen and Afya
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sweetgreen and Afya is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and Sweetgreen 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 Sweetgreen are associated (or correlated) with Afya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afya has no effect on the direction of Sweetgreen i.e., Sweetgreen and Afya go up and down completely randomly.
Pair Corralation between Sweetgreen and Afya
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.09 times more return on investment than Afya. However, Sweetgreen is 2.09 times more volatile than Afya. It trades about 0.11 of its potential returns per unit of risk. Afya is currently generating about 0.06 per unit of risk. If you would invest 780.00 in Sweetgreen on August 24, 2024 and sell it today you would earn a total of 3,560 from holding Sweetgreen or generate 456.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Afya
Performance |
| Timeline |
| Sweetgreen |
| Afya |
Sweetgreen and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Afya
The main advantage of trading using opposite Sweetgreen and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Afya 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 Afya will offset losses from the drop in Afya's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Afya vs. Adtalem Global Education | Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Strategic Education |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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