Correlation Between Sweetgreen and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Arrow Electronics 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 Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Arrow Electronics, you can compare the effects of market volatilities on Sweetgreen and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Arrow Electronics.
Diversification Opportunities for Sweetgreen and Arrow Electronics
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and Arrow is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Sweetgreen i.e., Sweetgreen and Arrow Electronics go up and down completely randomly.
Pair Corralation between Sweetgreen and Arrow Electronics
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.85 times more return on investment than Arrow Electronics. However, Sweetgreen is 2.85 times more volatile than Arrow Electronics. It trades about 0.08 of its potential returns per unit of risk. Arrow Electronics is currently generating about 0.02 per unit of risk. If you would invest 1,011 in Sweetgreen on September 5, 2024 and sell it today you would earn a total of 2,842 from holding Sweetgreen or generate 281.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Arrow Electronics
Performance |
| Timeline |
| Sweetgreen |
| Arrow Electronics |
Sweetgreen and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Arrow Electronics
The main advantage of trading using opposite Sweetgreen and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Sweetgreen vs. Hyatt Hotels | Sweetgreen vs. Smart Share Global | Sweetgreen vs. Wyndham Hotels Resorts | Sweetgreen vs. WW International |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. ScanSource | Arrow Electronics vs. PC Connection | Arrow Electronics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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