Correlation Between Sweetgreen and Drive Shack
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Drive Shack 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 Drive Shack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Drive Shack, you can compare the effects of market volatilities on Sweetgreen and Drive Shack 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 Drive Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Drive Shack.
Diversification Opportunities for Sweetgreen and Drive Shack
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and Drive is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Drive Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drive Shack 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 Drive Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drive Shack has no effect on the direction of Sweetgreen i.e., Sweetgreen and Drive Shack go up and down completely randomly.
Pair Corralation between Sweetgreen and Drive Shack
If you would invest 3,082 in Sweetgreen on August 30, 2024 and sell it today you would earn a total of 1,161 from holding Sweetgreen or generate 37.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Sweetgreen vs. Drive Shack
Performance |
| Timeline |
| Sweetgreen |
| Drive Shack |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sweetgreen and Drive Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Drive Shack
The main advantage of trading using opposite Sweetgreen and Drive Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Drive Shack 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 Drive Shack will offset losses from the drop in Drive Shack's long position.| Sweetgreen vs. Chipotle Mexican Grill | Sweetgreen vs. Yum Brands | Sweetgreen vs. The Wendys Co | Sweetgreen vs. McDonalds |
| Drive Shack vs. Dominos Pizza | Drive Shack vs. Playtika Holding Corp | Drive Shack vs. Shake Shack | Drive Shack vs. Ryanair Holdings PLC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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