Correlation Between Sweetgreen and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Algoma Steel 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 Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Algoma Steel Group, you can compare the effects of market volatilities on Sweetgreen and Algoma Steel 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 Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Algoma Steel.
Diversification Opportunities for Sweetgreen and Algoma Steel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sweetgreen and Algoma is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group 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 Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Sweetgreen i.e., Sweetgreen and Algoma Steel go up and down completely randomly.
Pair Corralation between Sweetgreen and Algoma Steel
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.66 times more return on investment than Algoma Steel. However, Sweetgreen is 1.66 times more volatile than Algoma Steel Group. It trades about 0.15 of its potential returns per unit of risk. Algoma Steel Group is currently generating about 0.09 per unit of risk. If you would invest 3,610 in Sweetgreen on September 1, 2024 and sell it today you would earn a total of 488.00 from holding Sweetgreen or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Algoma Steel Group
Performance |
| Timeline |
| Sweetgreen |
| Algoma Steel Group |
Sweetgreen and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Algoma Steel
The main advantage of trading using opposite Sweetgreen and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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