Correlation Between Sweetgreen and CITIC
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and CITIC 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 CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and CITIC Limited, you can compare the effects of market volatilities on Sweetgreen and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and CITIC.
Diversification Opportunities for Sweetgreen and CITIC
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sweetgreen and CITIC is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of Sweetgreen i.e., Sweetgreen and CITIC go up and down completely randomly.
Pair Corralation between Sweetgreen and CITIC
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.56 times more return on investment than CITIC. However, Sweetgreen is 2.56 times more volatile than CITIC Limited. It trades about 0.1 of its potential returns per unit of risk. CITIC Limited is currently generating about -0.22 per unit of risk. If you would invest 3,805 in Sweetgreen on September 3, 2024 and sell it today you would earn a total of 293.00 from holding Sweetgreen or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. CITIC Limited
Performance |
| Timeline |
| Sweetgreen |
| CITIC Limited |
Sweetgreen and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and CITIC
The main advantage of trading using opposite Sweetgreen and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.| Sweetgreen vs. Highway Holdings Limited | Sweetgreen vs. QCR Holdings | Sweetgreen vs. Partner Communications | Sweetgreen vs. Acumen Pharmaceuticals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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