Correlation Between Sweetgreen and Carnival
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Carnival 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 Carnival into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Carnival, you can compare the effects of market volatilities on Sweetgreen and Carnival 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 Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Carnival.
Diversification Opportunities for Sweetgreen and Carnival
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sweetgreen and Carnival is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival 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 Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival has no effect on the direction of Sweetgreen i.e., Sweetgreen and Carnival go up and down completely randomly.
Pair Corralation between Sweetgreen and Carnival
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.45 times less return on investment than Carnival. In addition to that, Sweetgreen is 2.13 times more volatile than Carnival. It trades about 0.13 of its total potential returns per unit of risk. Carnival is currently generating about 0.41 per unit of volatility. If you would invest 2,100 in Carnival on August 24, 2024 and sell it today you would earn a total of 435.00 from holding Carnival or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Carnival
Performance |
| Timeline |
| Sweetgreen |
| Carnival |
Sweetgreen and Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Carnival
The main advantage of trading using opposite Sweetgreen and Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Carnival 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 Carnival will offset losses from the drop in Carnival's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Carnival vs. Royal Caribbean Cruises | Carnival vs. Airbnb Inc | Carnival vs. Expedia Group | Carnival vs. Booking Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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