Correlation Between Sweetgreen and Anglo American
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Anglo American 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 Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Anglo American Platinum, you can compare the effects of market volatilities on Sweetgreen and Anglo American 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 Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Anglo American.
Diversification Opportunities for Sweetgreen and Anglo American
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sweetgreen and Anglo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American Platinum has no effect on the direction of Sweetgreen i.e., Sweetgreen and Anglo American go up and down completely randomly.
Pair Corralation between Sweetgreen and Anglo American
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.35 times more return on investment than Anglo American. However, Sweetgreen is 1.35 times more volatile than Anglo American Platinum. It trades about 0.07 of its potential returns per unit of risk. Anglo American Platinum is currently generating about 0.01 per unit of risk. If you would invest 3,082 in Sweetgreen on September 1, 2024 and sell it today you would earn a total of 1,016 from holding Sweetgreen or generate 32.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Sweetgreen vs. Anglo American Platinum
Performance |
| Timeline |
| Sweetgreen |
| Anglo American Platinum |
Sweetgreen and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Anglo American
The main advantage of trading using opposite Sweetgreen and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Anglo American vs. Defiance Silver Corp | Anglo American vs. HUMANA INC | Anglo American vs. SCOR PK | Anglo American vs. Aquagold International |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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