Correlation Between Sweetgreen and Citizens
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Citizens 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 Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Citizens, you can compare the effects of market volatilities on Sweetgreen and Citizens 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 Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Citizens.
Diversification Opportunities for Sweetgreen and Citizens
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sweetgreen and Citizens is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens 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 Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Sweetgreen i.e., Sweetgreen and Citizens go up and down completely randomly.
Pair Corralation between Sweetgreen and Citizens
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.32 times more return on investment than Citizens. However, Sweetgreen is 1.32 times more volatile than Citizens. It trades about 0.1 of its potential returns per unit of risk. Citizens is currently generating about -0.02 per unit of risk. If you would invest 3,802 in Sweetgreen on September 2, 2024 and sell it today you would earn a total of 296.00 from holding Sweetgreen or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Citizens
Performance |
| Timeline |
| Sweetgreen |
| Citizens |
Sweetgreen and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Citizens
The main advantage of trading using opposite Sweetgreen and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.The idea behind Sweetgreen and Citizens pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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