Correlation Between Sweetgreen and Allied Gaming

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Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Allied Gaming 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 Allied Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Allied Gaming Entertainment, you can compare the effects of market volatilities on Sweetgreen and Allied Gaming 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 Allied Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Allied Gaming.

Diversification Opportunities for Sweetgreen and Allied Gaming

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sweetgreen and Allied is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Allied Gaming Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Gaming Entert 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 Allied Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Gaming Entert has no effect on the direction of Sweetgreen i.e., Sweetgreen and Allied Gaming go up and down completely randomly.

Pair Corralation between Sweetgreen and Allied Gaming

Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.07 times more return on investment than Allied Gaming. However, Sweetgreen is 1.07 times more volatile than Allied Gaming Entertainment. It trades about 0.07 of its potential returns per unit of risk. Allied Gaming Entertainment is currently generating about -0.2 per unit of risk. If you would invest  3,395  in Sweetgreen on September 12, 2024 and sell it today you would earn a total of  485.00  from holding Sweetgreen or generate 14.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sweetgreen  vs.  Allied Gaming Entertainment

 Performance 
       Timeline  
Sweetgreen 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Sweetgreen reported solid returns over the last few months and may actually be approaching a breakup point.
Allied Gaming Entert 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Allied Gaming Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sweetgreen and Allied Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sweetgreen and Allied Gaming

The main advantage of trading using opposite Sweetgreen and Allied Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Allied Gaming 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 Allied Gaming will offset losses from the drop in Allied Gaming's long position.
The idea behind Sweetgreen and Allied Gaming Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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