Correlation Between Sweetgreen and Allbirds
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Allbirds 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 Allbirds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Allbirds, you can compare the effects of market volatilities on Sweetgreen and Allbirds 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 Allbirds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Allbirds.
Diversification Opportunities for Sweetgreen and Allbirds
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and Allbirds is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Allbirds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allbirds 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 Allbirds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allbirds has no effect on the direction of Sweetgreen i.e., Sweetgreen and Allbirds go up and down completely randomly.
Pair Corralation between Sweetgreen and Allbirds
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 0.79 times more return on investment than Allbirds. However, Sweetgreen is 1.27 times less risky than Allbirds. It trades about 0.1 of its potential returns per unit of risk. Allbirds is currently generating about -0.03 per unit of risk. If you would invest 849.00 in Sweetgreen on August 28, 2024 and sell it today you would earn a total of 3,548 from holding Sweetgreen or generate 417.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Allbirds
Performance |
| Timeline |
| Sweetgreen |
| Allbirds |
Sweetgreen and Allbirds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Allbirds
The main advantage of trading using opposite Sweetgreen and Allbirds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Allbirds 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 Allbirds will offset losses from the drop in Allbirds' long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Allbirds vs. Stitch Fix | Allbirds vs. Genesco | Allbirds vs. Shoe Carnival | Allbirds vs. Lulus Fashion Lounge |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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