Correlation Between Sweetgreen and Baozun
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Baozun 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 Baozun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Baozun Inc, you can compare the effects of market volatilities on Sweetgreen and Baozun 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 Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Baozun.
Diversification Opportunities for Sweetgreen and Baozun
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and Baozun is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun Inc 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 Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of Sweetgreen i.e., Sweetgreen and Baozun go up and down completely randomly.
Pair Corralation between Sweetgreen and Baozun
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.8 times less return on investment than Baozun. In addition to that, Sweetgreen is 1.22 times more volatile than Baozun Inc. It trades about 0.08 of its total potential returns per unit of risk. Baozun Inc is currently generating about 0.27 per unit of volatility. If you would invest 272.00 in Baozun Inc on November 1, 2024 and sell it today you would earn a total of 52.00 from holding Baozun Inc or generate 19.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Baozun Inc
Performance |
| Timeline |
| Sweetgreen |
| Baozun Inc |
Sweetgreen and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Baozun
The main advantage of trading using opposite Sweetgreen and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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