Correlation Between Sweetgreen and FAT Brands
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and FAT Brands 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 FAT Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and FAT Brands, you can compare the effects of market volatilities on Sweetgreen and FAT Brands 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 FAT Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and FAT Brands.
Diversification Opportunities for Sweetgreen and FAT Brands
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sweetgreen and FAT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and FAT Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAT Brands 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 FAT Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAT Brands has no effect on the direction of Sweetgreen i.e., Sweetgreen and FAT Brands go up and down completely randomly.
Pair Corralation between Sweetgreen and FAT Brands
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 0.88 times more return on investment than FAT Brands. However, Sweetgreen is 1.14 times less risky than FAT Brands. It trades about 0.07 of its potential returns per unit of risk. FAT Brands is currently generating about 0.03 per unit of risk. If you would invest 3,458 in Sweetgreen on September 13, 2024 and sell it today you would earn a total of 425.00 from holding Sweetgreen or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. FAT Brands
Performance |
| Timeline |
| Sweetgreen |
| FAT Brands |
Sweetgreen and FAT Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and FAT Brands
The main advantage of trading using opposite Sweetgreen and FAT Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, FAT Brands 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 FAT Brands will offset losses from the drop in FAT Brands' long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| FAT Brands vs. FAT Brands | FAT Brands vs. Brinker International | FAT Brands vs. Jack In The | FAT Brands vs. Potbelly Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |